More than $136 Billion in North American Industrial Project Spending Forecast for 2007

Manufacturing News, Source : The Manufacturer US
Zone : Leadership and strategy
Published : 17 Jan 2007 14:05

SUGAR LAND--January 17, 2007--According to Industrial Info Resources’ (Sugar Land, Texas) Project Spending Index North America industrial project spending experienced 15.3% growth in 2006 when compared to 2005, increasing from 5,450 projects valued at $144 billion in 2005 to 5,967 projects valued at $166 billion in 2006.

Eight of the fourteen market regions in North America experienced industrial project spending growth in 2006, led by the New England Region with 111% growth. Other regions experiencing growth in 2006 include Western Canada with 67.4% growth, Atlantic Canada with 58.7% growth, Great Lakes with 54.8% growth, and the Midwest with 35% growth.

Six North American market regions experienced negative growth in 2006 including Mexico, Quebec, West Coast, Southeast, Rocky Mountains, and the Northeast.

Looking ahead to 2007, more than 5,400 major projects with a total investment value of $314 billion have been identified to begin construction this year in North America. Using a Confidence Factor derived from past spending performances, Industrial Info is forecasting that $136 billion in project activity will actually take place. The Confidence Factor is the percent change in total investment value from the initial forecast to the actual amount of spending that reaches fruition. In the U.S., $254 billion in activity is scheduled for construction in 2007. Based on a Confidence Factor of 43.5%, it is estimated that $110 billion in spending will actually take place.

Industrial Info monitors thousands of projects as they progress through various stages of development, from market analysis, planning, design, permitting, AFE submittal, capital approval and construction. During the year, Industrial Info measures the amount of Project Fallout, those projects that are delayed, postponed or cancelled and adjusts the Confidence Factor accordingly. This forward-looking approach provides a benchmark to measure market growth, spending activity, trends and performance projections as the year progresses.

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