GMI Paints Healthy Picture of 24-Month Kickoff Outlook for North America
Industrial Info's Global Market Intelligence (GMI) Integrated Platform is tracking more than $1.18 trillion in projects this month in North America that are slated to kick off construction over the next 24 months, a slight decrease (1%) from the 24-month December outlook of $1.19 trillion.
Comprising this $1.18 trillion total are more than 18,500 projects in the U.S. and Canada, which are scheduled to begin construction from January of this year through December 2019. These are vibrant economic indicators for investors, as confidence for planned project spend continues to hold at steady levels.
By total investment value (TIV), the Power Industry is the leading spender, with more than $315 billion in planned kickoffs, followed by Oil & Gas Production at $227 billion, and Industrial Manufacturing at $165 billion. Not all of the projects will kick off as planned; Industrial Info ranks the probability of each project moving forward as planned in either high, medium, or low categories.
Project spending trends will be concentrated geographically in the Southwest market region of the United States at $265 billion, followed closely by the market region of Western Canada at over $252 billion.
Not surprisingly, the majority of the projects in the Southwest region will occur in Texas, projected at over $187 billion, followed by Louisiana at $56 billion. The West Coast, which is third in overall spend by market region, is boosted by the large California projection of $50 billion. The Western Canada region is carried in large part by the provinces of British Columbia (which will see tremendous project spend of $113 billion) and Alberta (trailing closely behind at $111 billion).
One of the largest potential kickoffs involves a $5.3 billion joint venture, grassroot ethylene plant by Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas) and Saudi Basic Industries Corporation (SABIC) (Riyadh, Saudi Arabia) in Portland, Texas. The joint venture plans to build a 13,000-acre petrochemical complex to produce an estimated 3.96 billion pounds/year of ethylene, as well as several downstream units. The probability assessment of the project's construction is ranked as medium (70-80% probability of moving forward), with a final investment decision expected by Q2 2018. Construction would kick off in Q3 2018, with completion in late 2021.
For more information, see Industrial Info's project report.
Kickoffs will climb quickly in spending throughout the 2018 year, peaking in October 2018, and again in March 2019, before tapering off as 2019 winds down.
Capital ($1.16 trillion) versus maintenance ($23 billion) spending for the 24-month January outlook remains at a consistent ratio of 98% to 2%, with little change from previous months.
Of the $1.16 trillion TIV planned for capital kickoffs over the next 24 months, $102 billion (9%) of the spending has been approved and is moving forward in funding, engineering, and construction phases, while $1.06 trillion (91%) remains in the proposal phase.
IIR'S GMI Platform provides a healthy picture of the coming kickoffs in industrial spending for North America over the next 24 months, with a total investment value (TIV) of $1.18 trillion. Current construction activity for North America is as follows:
- The value of activity currently in the construction phase is $416 billion in North America. Of this, $340 billion is in the U.S. and $76 billion is in Canada.
- The top three industries leading active construction phase projects in North America this month are: Industrial Manufacturing ($123 billion), Power ($107 billion), and Oil & Gas Production ($54 billion).
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