U.S. Industrial Manufacturing Industry Could See Increased Capital & Maintenance Spending in 2012

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Researched by Industrial Info Resources (Sugar Land, Texas)--The recession was tough on all industries, and the recovery period has been longer and more difficult than most expected. The economy remains unstable despite increases in total spending across the United States and unemployment continues to be a significant problem. However, throughout the recovery process and despite the inability of the economy to get back on track, spending has remained strong. This has been especially true within the U.S. Industrial Manufacturing Industry. Spending dipped significantly in 2010 and made a major recovery in 2011 within this key industry. However, looking ahead at the capital and maintenance projects planned to begin construction in the coming year shows an industry that could be on the verge of significant growth in total spending by the time 2012 ends.

Click on image for a breakdown by market of planned 2012 spending in the U.S. Industrial Manufacturing Industry.

Because of the recession and the significant problems that faced the automotive sector in the U.S., spending only reached the $16 billion mark in 2010. Despite the shaky economic situation through the entire year, 2011 brought significant improvement, with total capital and maintenance expenditures within the Industrial Manufacturing Industry topping the $30 billion mark. In 2011, the automotive sector made a huge comeback, and despite the economic situation, companies continued to invest in their infrastructure, which helped to create jobs throughout the year.

In 2012, there are already $35.5 billion worth of capital and maintenance projects that are scheduled to begin construction during the year. Given this base of proposed project work, it is highly likely that the Industrial Manufacturing Industry will see total expenditures by year's end that top $40 billion or $45 billion. Despite economic concerns both in the U.S. and Europe, companies have continued to invest in the U.S. and are likely to stay on this path throughout 2012. This will not only increase the total expenditures within the industry, but also will create thousands of jobs as the year progresses.

As with most years, the largest numbers of projects are expected to be centered on the Great Lakes region of the country. Currently, Industrial Info is tracking 186 capital and maintenance projects worth an estimated $4.7 billion that are scheduled to begin construction in the region in 2012. With the resurgence of automotive-related spending, this total will certainly increase as the year develops. The West Coast region is expected to see the most significant expenditures for 2012. Currently there are $13.7 billion worth of capital or maintenance projects that are scheduled to begin construction in the coming year in this region. The high total investment is due to several key rail projects that will reach the construction stage next year.

The Southwest and Southeast regions of the U.S. continue to be growth areas for the industry as well. Between these two regions there, are more than $6 billion worth of projects that are scheduled for a 2012 construction start. This amount is likely to double, if not triple, by the end of the year, as many companies have found these regions very attractive areas to locate their operations. The Mid-Atlantic region, with $3.4 billion in planned 2012 construction starts, has been another region that has seen significant increases in total investment in recent years, while the Rocky Mountains region, with increased interest in rail projects, has also seen some significant growth, and with $3.3 billion in project activity already planned for 2012, the region will certainly continue to attract more business.

Overall, the Industrial Manufacturing Industry is heading into 2012 with very firm spending in place. While many of these projects will not reach the construction stage of development for a variety of reasons, hundreds of others will undoubtedly take their place, helping to increase the total investment within the industry for the year. Companies showed in 2011 that they were once again comfortable with allocating funds to expand their respective footprints in the U.S. and that continued investment in 2012 will help to propel the Industrial Manufacturing Industry past the year-end spending totals of 2011 and make 2012 a year of great promise for the industry.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.