Southwest to See Steady Industrial Construction in Short Term

Oct 1, 2007 12:00 PM

Industrial Info Resources (IRR), Sugar Land, Texas, is tracking an estimated $45.7 billion in total capital and maintenance planned to begin construction next year in the Southwest. This level of spending matches activity identified in the same period last year almost exactly, when spending was forecast at $45.3 billion. According to the market research firm, the new spending reported for 2008 represents more than 700 individual projects spread across 12 industries with nearly 200 of those being planned maintenance turnarounds or outages valued at more than $1.1 billion.

A great deal of growth in the region is based on major projects planned in the energy sector, including power, oil and gas, and refining. The power industry is expected to easily be the top spender in 2008, with more than $17.8 billion in total spending already identified in the region. At least six major projects exceed a total investment of $1 billion each, including three grassroots power stations, two major unit additions, and one station repowering.

The transmission, storage, and production of oil and gas products — one of the region's most mature industries — is expected to invest almost half that amount at an estimated $8.4 billion in 2008. The petroleum refining industry plans another big year with identified investments exceeding $5 billion. The chemical processing industry is forecast to invest $4.9 billion, and the alternative fuels industry continues to make a place for itself as a top-growth industry regionally with more than $3.6 billion planned for 2008. At the other end of the spectrum are the food and beverage and pulp, paper, and wood industries, which continue to struggle. Combined, only a handful of projects have been identified for these two industry segments, totaling less than $300 million in total spending for the year.

(click here to see Table)