North American Project Spending Index Shows First Year-Over-Year Gain in 12 Months
Overall project spending has been roiled by the economic fallout from the COVID-19 pandemic and other factors. As of Thursday, Industrial Info was tracking $267 billion worth of project activity that has been affected by the coronavirus in North America, ranging from delays to cancellations.
For January, the spending index totaled $704.15 billion, up 2.7% from $685.61 billion reported in January 2020. Year-over-year project spending increases in January were reported in five of the 12 industries followed by Industrial Info.
Industrial Manufacturing posted $161.05 billion in spending, a 21% jump over spending levels a year earlier.
The Institute of Supply Management's (ISM) Purchasing Managers Index (PMI), which follows 18 industry sectors in the U.S., registered 58.7% in January. Any reading above 50% indicates expansion in the manufacturing economy.
Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee, said the survey results showed the continuation of recovery following contraction during March, April and May of last year. Survey respondents "reported that their companies and suppliers continue to operate in reconfigured factories, but absenteeism, short-term shutdowns to sanitize facilities and difficulties in returning and hiring workers are continuing to cause strains that limit manufacturing growth potential," he added. For more information, see February 5, 2021, article - ISM: U.S. Manufacturing Growth Slows Slightly, Faces COVID-Induced Challenges.
On Thursday, the U.S. Census Bureau reported new orders for manufactured durable goods increased 3.4% to $256.6 billion in January, from $248.1 billion in December. As of January, U.S. manufacturing had recovered 803,000 of the 1.4 million jobs lost during March and April 2020, according to the U.S. Bureau of Labor Statistics.
Oil & Gas Production spending amounted to $103.64 billion, up 18.26% year over year.
January was a "remarkable month," according to the American Petroleum Institute's (API) Monthly Statistical Report, with total U.S. petroleum demand returning to within 1.2% of its level in January 2020. U.S. petroleum demand, as measured by total domestic petroleum deliveries, was 19.7 million barrels per day (BBL/d). The API reported "solid" U.S. production of crude oil (11.1 million BBL/d) and natural gas liquids (5.1 million BBL/d).
The North America Spending Index for January also reported year-over-year increases by the Power (up 3.39%) Pipelines (up 4.68%) and Food & Beverage (up 1.95%) industries.
The North American Spending Gap Index, which measures the amount of fallout from projects that have been canceled, placed on hold or moved to another year, narrowed to $1.4 billion, or nearly half of what it was in January 2020. Six of the 12 industries tracked by Industrial Info saw a drop in the spending gap compared with a year earlier.
However, Industrial Info's North American Construction Starts Index, which measures the amount of project activity that has been funded and started construction for the year so far, amounted to $22.61 billion last month, down 21.1% from construction starts in January 2020.