North America's Metals & Minerals Industry Kicks Off $12.38 Billion of Projects in 2016
The North American Metals & Minerals Industry ended 2016 with $12.38 billion worth of industrial projects having started construction. That represents more than a 40% decline in value compared with 2015, when $20.71 billion worth of projects started construction, according to Industrial Info's North American Project Spending Index.
The three largest Metals & Minerals Industry sectors for projects starts in 2016 were mining, steel manufacturing, and foundries & forging. In spite of tumbling project activity the mining industry began construction on 89 projects, representing more than $3.4 billion. Steel manufacturers started construction of 178 projects, representing $2.9 billion.
Led by a 59% drop-off in project starts in Canada and a 13% drop-off in the U.S., 2016 represents the least amount of project activity since 2010. In the U.S., project starts declined from $12.3 billion in 2015 to $10.7 billion in 2016.
Mexico was the only bright spot in 2016, increasing 2.3% from $2.6 billion in 2015 to $2.7 billion in 2016. One of the larger projects to begin construction in Mexico last year was a $600 million grassroot steel mill, which is being constructed by Grupo Simec SA de CV in Tlaxcala, Mexico.
Declines in mining project starts have severely impacted Metals & Minerals project starts in Canada. No new oil sands mining projects are expected to start in the near future, and the mining sector in general has experienced cuts in capital spending as waning global demand and overcapacity have dominated the industry. Early indicators of project spending, including commodity prices, improved in 2016, a welcomed stabilization, but a prolonged improvement in demand/commodity prices will be needed before any significant project activity begins. Nevertheless, Industrial Info is expecting 2017 to be a better year for Metals & Minerals project activity in North America.
The incoming Trump administration is viewed as being pro-coal and pro-steel, which could benefit those sectors over the next few years.
Join us for a discussion of the project spending trends and analysis in the upcoming Global Metals & Minerals Webinar on January 31, 2017.
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