U.S. Industrial Manufacturing Industry Expects to See $10 Billion in Construction Starts in Fiscal First-Quarter 2014

---

Researched by Industrial Info Resources (Sugar Land, Texas)--With the U.S. economy is doing well and unemployment continuing to decrease at a slow pace, Americans are looking to 2014 with expectant eyes. But November's mid-term elections are approaching, which means no help can be expected from Washington, D.C. for yet another year. In 2013, the Industrial Manufacturing Industry saw more than 1,100 capital and maintenance projects worth an estimated $30.5 billion begin construction, and 2014 appears to be starting on the right track. Industrial Info is tracking 254 Industrial Manufacturing capital and maintenance projects worth an estimated $9.94 billion that are scheduled to begin construction in the first quarter.

Click on the image at right for a graph detailing projects that are scheduled to begin construction in the U.S. Industrial Manufacturing Industry in the first quarter of 2014.

Since the end of the Great Recession, there has been a fundamental shift in the industry's spending. Traditionally, the industry could count on $10 billion in annual project activity out of both the automotive and the transportation systems sectors, with the balance of the sectors, led by heavy manufacturing, making up the rest. However, as the automotive sector restructured and re-invented itself in the new post-recession world, spending activity has changed.

The transportation systems sector has seen its spending increase over the past couple of years due to high oil and gas prices, the necessity of rebuilding existing infrastructure to meet demand, and new markets opening up due to the boom in oil and gas development in the U.S. During the first quarter of 2014, the transportation systems sector is expected to see the most project activity and the highest spending totals. Industrial Info is tracking 125 projects worth an estimated $5.97 billion within the transportation systems sector that are scheduled to begin construction during the first three months of 2014.

The automotive sector has slowed its expenditures annually since its reorganization. During the first quarter of 2014, $2.2 billion in projects are scheduled to begin construction in the U.S. While this should still translate into close to $8 billion in spending by the end of 2014, this sector has certainly taken a back seat when compared with the transportation systems sector. Spending within the automotive sector is now much more targeted, with fewer grassroot opportunities and more expansions, retools and upgrades. This is certainly a good thing for the sector, as spending was somewhat out of control in the pre-recession world and was in dire need of some kind of focus.

The heavy manufacturing sector also will see some significant spending during the first quarter, with $645 million in capital and maintenance projects currently scheduled to begin construction. While this is not anywhere near as large as the aforementioned sectors, it is a solid start for heavy manufacturing, where more harm than good was done during the recession. A number of the major companies within this sector continue to reorganize and consolidate their operations, even years after the recession officially ended.

For the Industrial Manufacturing Industry, "where" is almost as important as "who" is spending each year. For the first quarter, the heaviest concentration of projects will be in two regions of the U.S.: the Great Lakes, which is expected to see 55 projects worth $2.12 billion begin construction, and the Mid-Atlantic, which will add 44 projects worth $2.17 billion. The Northeast and Southeast regions also will see some significant activity, with $1.5 billion and $1.2 billion in projects beginning construction, respectively, while the balance of the regions are expected to see less than $1 billion in total spending for the quarter.

Industry spending certainly will increase during the prime construction months in the second and third quarters of the year, which should lead to another year of more than $30 billion in total spending for the industry. Just less than $10 billion in total capital and maintenance spending is a solid base on which the industry can build as the year progresses. There may be a slight slowdown in planned projects as November approaches and companies await the results of the mid-term elections. But second- and third-quarter spending should be large enough to keep the industry on track for 2014, and it all starts with solid spending numbers for the first quarter of the year.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, 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.