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Released September 18, 2023 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--U.S. manufacturers continue to report a downtrend in expected capital expenditures and optimism, based on the latest outlook survey by the National Association of Manufacturers (NAM), although Industrial Info's Global Market Intelligence (GMI) Project Database shows project activity in the Industrial Manufacturing Industry remains robust.
The NAM survey ran from August 17 to August 31 and received 323 responses, featuring small (those with 49 or less employees), medium-sized (between 50 and 499 employees) and large manufacturers (500 or more employees).
According to the survey results, which were released on September 13, respondents to the survey anticipate an increase of 1.2% in capital spending over the next 12 months, lower than 1.3% last quarter and 2.3% in fourth-quarter 2022--marking the lowest rate since third-quarter 2020.
Nearly 36.5% of respondents expect additional capital spending in the next year, with 45.8% predicting no change and 17.8% forecasting reduced capital expenditures.
In terms of overall sentiment, just 65.1% of respondents were positive about their own company's outlook--the lowest mark since second-quarter 2020--and down from 67% in the second quarter of this year.
According to the summary of findings, more than 72% of manufacturers cited the inability to attract and retain employees as their top primary challenge, followed by a weaker domestic economy (60.7%), rising health care costs (60.1%) and an unfavorable business climate (56.7%).
In terms of that unfavorable business climate, more than 70% of manufacturers said they would purchase more capital equipment "if the regulatory burden on manufacturers decreased," with 48.6% hiring more workers and 42.5% expanding their U.S. facilities.
However, the latest NAM outlook survey showed some positive signs as well. Concerns regarding inflation and supply chain challenges--both of which were readily apparent in 2022--"have continued to moderate." And the percentage of manufacturers that believe the U.S. will experience a recession over the next 12 months (45.5%), or through third-quarter 2024, is down from nearly 57% last quarter.
The downtrend in manufacturers' capital-spending expectations is in line with the latest Purchasing Managers Index from the Institute for Supply Management (ISM), which showed manufacturing activity in the U.S. contracted in August for the 10th straight month. For more information on this and some Industrial Manufacturing Industry projects expected to kick off in the fourth quarter, see Industrial Info's September 7, 2023, article - ISM: U.S. Manufacturing Activity Contracts Again But Continues to Improve.
While the transportation systems and semiconductors & computers sectors account for more than half of the industry's planned spend thanks largely to three major projects, other sectors such as data centers, automotive and heavy manufacturing also shine.
LG Energy Solution (LGES) (Seoul, South Korea) plans to invest $5.5 billion in a new battery-manufacturing complex in Queen Creek, Arizona, which includes constructing two facilities that will produce batteries for electric vehicles (EV) and energy storage, respectively. The two projects are expected to kick off in November and December, with completion expected by the end of 2025.
One facility is for manufacturing cylindrical battery cells and modules for EVs, with an annual capacity of 27 gigawatt-hours (GWh). The planned $1.8 billion grassroot plant involves constructing a 1.5 million-square-foot manufacturing facility, 328,450 square feet of warehouse/distribution space, and other buildings, with an initial capacity of 2,170 battery cells per year. Meanwhile, the planned $2.3 billion grassroot manufacturing plant to produce lithium iron phosphate (LFP) batteries, which contain no cobalt or nickel, would feature a capacity of 16 GWh per year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can read detailed reports on the cylindrical and LFP battery projects.
In terms of data centers, Industrial Info is tracking two projects in Texas from Skybox Datacenters (Dallas, Texas) that are planned to kick off in October and wrap up in fourth-quarter 2024. This includes the $720 million first phase of its grassroot data center campus in Hutto, outside of Austin. The first phase involves constructing a 469,000-square-foot building with 12 data halls at the planned six-building campus, also known as PowerCampus Austin. Meanwhile, the $200 million Skybox Legacy II project in Plano will add a new building with two data halls to the Skybox Dallas Campus, which sits on 50 acres. Subscribers can see reports on the Hutto and Plano projects.
Subscribers to Industrial Info's GMI Database can click here to view reports for all of the projects discussed in this article and click here for the related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The NAM survey ran from August 17 to August 31 and received 323 responses, featuring small (those with 49 or less employees), medium-sized (between 50 and 499 employees) and large manufacturers (500 or more employees).
According to the survey results, which were released on September 13, respondents to the survey anticipate an increase of 1.2% in capital spending over the next 12 months, lower than 1.3% last quarter and 2.3% in fourth-quarter 2022--marking the lowest rate since third-quarter 2020.
Nearly 36.5% of respondents expect additional capital spending in the next year, with 45.8% predicting no change and 17.8% forecasting reduced capital expenditures.
In terms of overall sentiment, just 65.1% of respondents were positive about their own company's outlook--the lowest mark since second-quarter 2020--and down from 67% in the second quarter of this year.
According to the summary of findings, more than 72% of manufacturers cited the inability to attract and retain employees as their top primary challenge, followed by a weaker domestic economy (60.7%), rising health care costs (60.1%) and an unfavorable business climate (56.7%).
In terms of that unfavorable business climate, more than 70% of manufacturers said they would purchase more capital equipment "if the regulatory burden on manufacturers decreased," with 48.6% hiring more workers and 42.5% expanding their U.S. facilities.
However, the latest NAM outlook survey showed some positive signs as well. Concerns regarding inflation and supply chain challenges--both of which were readily apparent in 2022--"have continued to moderate." And the percentage of manufacturers that believe the U.S. will experience a recession over the next 12 months (45.5%), or through third-quarter 2024, is down from nearly 57% last quarter.
The downtrend in manufacturers' capital-spending expectations is in line with the latest Purchasing Managers Index from the Institute for Supply Management (ISM), which showed manufacturing activity in the U.S. contracted in August for the 10th straight month. For more information on this and some Industrial Manufacturing Industry projects expected to kick off in the fourth quarter, see Industrial Info's September 7, 2023, article - ISM: U.S. Manufacturing Activity Contracts Again But Continues to Improve.
While the transportation systems and semiconductors & computers sectors account for more than half of the industry's planned spend thanks largely to three major projects, other sectors such as data centers, automotive and heavy manufacturing also shine.
LG Energy Solution (LGES) (Seoul, South Korea) plans to invest $5.5 billion in a new battery-manufacturing complex in Queen Creek, Arizona, which includes constructing two facilities that will produce batteries for electric vehicles (EV) and energy storage, respectively. The two projects are expected to kick off in November and December, with completion expected by the end of 2025.
One facility is for manufacturing cylindrical battery cells and modules for EVs, with an annual capacity of 27 gigawatt-hours (GWh). The planned $1.8 billion grassroot plant involves constructing a 1.5 million-square-foot manufacturing facility, 328,450 square feet of warehouse/distribution space, and other buildings, with an initial capacity of 2,170 battery cells per year. Meanwhile, the planned $2.3 billion grassroot manufacturing plant to produce lithium iron phosphate (LFP) batteries, which contain no cobalt or nickel, would feature a capacity of 16 GWh per year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can read detailed reports on the cylindrical and LFP battery projects.
In terms of data centers, Industrial Info is tracking two projects in Texas from Skybox Datacenters (Dallas, Texas) that are planned to kick off in October and wrap up in fourth-quarter 2024. This includes the $720 million first phase of its grassroot data center campus in Hutto, outside of Austin. The first phase involves constructing a 469,000-square-foot building with 12 data halls at the planned six-building campus, also known as PowerCampus Austin. Meanwhile, the $200 million Skybox Legacy II project in Plano will add a new building with two data halls to the Skybox Dallas Campus, which sits on 50 acres. Subscribers can see reports on the Hutto and Plano projects.
Subscribers to Industrial Info's GMI Database can click here to view reports for all of the projects discussed in this article and click here for the related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
