Fueled by a soaring U.S. economy and lower corporate tax rates, industrial sector experts anticipate a 5.9 percent increase in overall U.S. industry plant spending to $328.5 billion in 2018. The spending forecast is up by $18.35 billion from last year according to the industry market research provider, Industrial Info Resources. This reflects a positive outlook for sheet metal and HVAC contractors who perform work in the industrial sector.
The U.S. tax incentives plan has also given a boost to performance expectations for 2018. The lower corporate tax rate on the repatriation of foreign earnings has boosted Industrial Info Resource's (IRR) project spending forecast by $9 billion, Industrial Info Executive Vice President Michael Bergen said. "We expect to see some of that repatriation of money coming back into the United States.”
"This economic cycle will be the longest period of recovery and expansion, by June 2019, since World War II," Mr. Bergen said. For 2018, the gross domestic product is expected to grow 2.8 percent, outpacing the 2.2 percent domestic growth average for the last nine years.
In the Midwest Region, Industrial Info forecasts $79.93 billion in industrial plant spending in 2018, up 12.8 percent from spending in 2017.
In the West, $51.84 billion in spending is projected, up 12.1 percent over spending last year. This includes development in the automotive sector, such as Tesla Inc.’s $5 billion lithium-ion battery plant in Nevada.
The Northeast Region will see $35.62 billion in spending this year, up 2.1 percent from last year, Bergen said, driven in large part by petrochemical plant development, primarily Shell Chemical Company's massive grassroot ethylene plant in Monaca, Pa.
The South, which includes the Gulf Coast region, will see $160.35 billion in spending in 2018, up 2 percent from last year. This represents more than half of all the forecast spending in the U.S. The projection includes a strong build-out in natural gas and crude oil pipelines.
For more information, members may read the 2018 Outlook in Review on the SMACNA website and visit IIR online.