Indiana traditionally maintains a healthy amount of spending on an annual basis within its borders. During the second half of 2007, the state played host to more than $7.5 billion worth of capital and maintenance projects. As the nation spirals into a recession, which is especially evident in the Great Lakes region of the country, Indiana has managed to remain strong in terms of its spending numbers. During the second quarter of 2008, although many parts of the country are posting declining spending numbers, Indiana is actually seeing a boost in total spending. Industrial Info is currently tracking more than $6.9 billion in total project work that is scheduled to begin construction in the state during the second quarter, a spending total only slightly below that of the entire second half of 2007.
The main reason for this boost in spending in the second quarter of the year is a very healthy Alternative Fuels Industry. As with Illinois and Ohio, the industry has added much-needed capital over the last two years to Indiana's spending outlook. During the second quarter, $5.4 billion worth of Alternative Fuels projects are expected to begin construction, significantly more than any other industry in the state for that period. Chief among the projects that are driving this spending is the proposed $3.7 billion grassroot coal-to-sng (substitute natural gas) plant that is expected to begin construction in June.
Following the Alternative Fuels Industry is the Power Industry, traditionally a powerhouse within the region when it comes to spending. The Power Industry is anticipating $830 million worth of construction starts during the quarter. Other big-spending industries during the quarter include the Pharmaceuticals & Biotech Industry with $330 million in spending, Metals & Minerals with $120 million and Food & Beverage with $114 million.
Some other key projects beginning construction for the state in the second quarter include the proposed $640 million grassroot 400-megawatt Fowler Ridge windfarm, a trio of proposed $200 million grassroot fuel ethanol plants, a proposed $150 million pharmaceutical distribution center, and a proposed $57 million grassroot metal stamping and assembly manufacturing plant.
Indiana appears to be weathering the downturn in the economy very well because of the aforementioned industry and project activity. While spending was slower during the second half of 2007, it has picked up as the prime construction period begins this summer and appears to remain steady into the third quarter as an additional $4.7 billion in spending is expected for that quarter, as well, a spending total that could increase as the summer moves forward. If this kind of spending activity continues, Indiana could weather the rough economic waters quite well and come out smelling like a rose when the economy recovers in the near future.
Industrial Info Resources is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services. To learn more, visit www.industrialinfo.com.
