Third-Quarter Spending in Illinois Remains Solid Thanks to Alternative Fuels Projects

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Great Lakes region of the country has suffered greatly over the past two years. Job losses and plant closures are at all-time highs, and the reliance on the automotive sector that has bolstered the region for decades has decimated the region in recent times. However, despite a nationwide recession, a collapsed automotive sector, a down housing market and credit woes that are affecting Wall Street, Main Street and the neighborhood street, some capital and maintenance spending has continued to occur in the region. For the majority of this year, the state of Illinois has been the lucky recipient of many of these projects, and a look at what is currently scheduled to begin construction in the third quarter shows that Illinois will remain strong in the coming months as well.

Click on image at right for a breakdown of spending by industry in Illinois in 3Q09.

The Alternative Fuels Industry has been driving the spending within the state of Illinois during the first half of the year and will continue to do so during the months of July, August and September. Currently, Industrial Info is tracking four major Alternative Fuels projects in Illinois worth an estimated $1.7 billion that will begin construction activities in the next three months. Some examples of the Alternative Fuels projects anticipated to begin construction include a proposed grassroot synthetic natural gas plant in Southern Illinois and a proposed grassroot fuel ethanol plant in northern Illinois.

After the Alternative Fuels industry, the drop-off in spending by industry is significant. The Power Industry takes a distant second place to Alternative Fuels with eight projects scheduled to begin construction during the third quarter worth an estimated $650 million. The Metals and Minerals Industry is a close third with $500 million in capital and maintenance spending in the form of 11 projects, the highest number of projects by any single industry kicking off construction during the quarter. The fourth and fifth slots are occupied by the Refining Industry with six projects worth $100 million and the Pharmaceuticals and Biotech Industry with $93 million in spending over nine projects.

Capital and maintenance spending in the third quarter is split relatively equally among the three sections that make up the state, at least when you look at project totals. In the northern section of the state, there are 29 projects worth an estimated $800 million that are scheduled to begin construction during the quarter. The central section of the state is contributing an additional 22 projects worth an estimated $375 million, while the southern section of the state has slightly fewer projects, 15, but the majority of the total invested money, $2 billion.

Given the current economic climate affecting the entire U.S., any spending occurring during a given quarter is good spending. More jobs will be created, more equipment will be purchased or rented, and the towns where these facilities are being built or expanded will benefit from the influx of people both during construction and operation of the facilities. Spending during the third quarter in Illinois is slightly down from the previous quarter, which had $4.7 billion of projects scheduled to start. However, more than $3 billion is still a significant amount of project activity, especially in this part of the country.

Hopefully, this level of spending will at least remain stable heading into the fourth quarter of this year and on into 2010. As the economic situation shows some improvement and the automotive sector takes significant steps to correct many of its problems, spending within the state of Illinois and the rest of the Great Lakes region should have a fair chance of increasing as 2010 rolls around.

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Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.