The "Twenty-Ten Industrial Market Outlook" event coincides with Industrial Info's release of the 2010 Global Industrial Outlook, which highlights the industrial spending forecast for the coming year. Since 1993, IIR has published a forecast for capital and maintenance spending for the industrial market in North America, and the 2010 outlook marks the fifth year of projecting spending estimates around the world.
At the Houston event, Davis provided a summary of North American spending for oil and gas production, transmission, and storage projects that are scheduled to start construction this year. He also contrasted the industry's current project spending with spending levels compiled in November:
- Spending on oil and gas production will total about $15.3 billion this year, down about $300 million from what was forecast three months ago
- Spending on oil and gas transmission will reach about $8.8 billion, a decline of nearly $700 million from the $9.54 billion this segment planned to spend last November
- Spending on oil and gas storage and terminals will fall by an estimated $7.4 billion this year, to $4.8 billion
Project spending fell dramatically for the storage and terminals segment, because several big-ticket projects, such as liquefied natural gas (LNG) terminals, have pushed their construction start dates into 2011, causing them to drop out of the 2010 spending outlook, Davis told the Houston audience. The Bradwood Landing LNG terminal in Oregon and the expansion of the Elba Island LNG Terminal in Georgia also could possibly be pushed into 2011, lowering spending in 2010 even more.
"It may not be front-page news to say that oil & gas project spending is volatile, or that spending is driven by oil and gas prices, but those truisms have been certainly been demonstrated in recent months," Davis said.
Industrial spending is necessarily dynamic, he continued, and this dynamism is reflected in Industrial Info's rigorous quality-assurance research process. Like all of Industrial Info's 2010 industry outlooks, the projection for the Oil & Gas Industry's capital and maintenance spending project activity is driven by Industrial Info's commitment to reporting, confirming, and frequently updating capital and maintenance project spending data. Industrial Info's quality-assurance principle, which it trademarked as the Living Forward Reporting Principle™, ensures that clients are provided with the most accurate and current market intelligence on industrial project spending around the world, including capital projects, maintenance spending, analytics, and market forecasting.
Looking on the bright side of the oil & gas project spending, Davis noted that more oil and gas rigs are operating today compared to last November. Citing data from Baker Hughes, Davis said that the U.S. has about 100 more oil rigs operating today than in November. Similarly, the number of gas rigs in the U.S. also has increased by about 100 during that time.