Industrial Manufacturing Summer Shutdown Activity Remains Strong In U.S.
There is no doubt that in the past two years the industrial manufacturing industry has been hammered more viciously than any other industry by the global recession. The vast majority of the jobs lost in the nation have come from the various sectors that compose the industry. Add to the job losses the massive amount of consolidation and plant closures that have occurred since December 2007 in the industry, and you have a virtual tragedy in the making. However, despite these significant problems, the industry has struggled along.
Industrial Info Resources (Sugar Land, TX) reports that, while the industrial manufacturing sector has seen spending decrease significantly as companies hold onto their money, as 2010 unfolds, we are beginning to see the first significant, concrete signs that the industry is ready to recover. In the coming summer months, the industrial manufacturing industry will see strong summer shutdown activity across the United States, a good indication of recovery.
The U.S. Great Lakes region, an area that has been devastated by the combined recession and collapse of the North American automotive sector, will see the most shutdown activity this summer. During the second and third quarters, 37 maintenance projects worth an estimated $64 million are currently scheduled to begin in the region. The vast majority of these maintenance projects are automotive-related, as the automotive sector continues its traditional summer shutdown schedule, despite its collective woes.
During the past two years, there has been a significant amount of shuffling of summer maintenance work as the automotive sector lengthened its routine maintenance periods to reduce production as sales continued to fall. However, this year, early indications are that automotive sales are stabilizing, and the automakers and their respective tier suppliers are returning to a more normal schedule of maintenance activities. Outside of the Great Lakes region, this can also be seen in the Southeast region of the country, another hot spot of automotive activity. In the Southeast, there are currently 22 maintenance projects worth an estimated $34 million scheduled to begin activities this summer.
The majority of these projects will take place in July, when the automotive sector typically takes its plants down for maintenance work. However, there is also a sprinkling of additional maintenance projects outside of the automotive sector that will take place either earlier in the summer or slightly later. University powerhouses, a golf club manufacturing plant, farm equipment plants and carpet mills are just a few examples of the type of facilities that also utilize the nicer weather of summer to perform maintenance work.
While the overall spending total for summer shutdown activity in the Industrial Manufacturing Industry may not be as impressive as the maintenance budgets of other industries such as petroleum refining or chemical processing, the fact that 118 maintenance projects worth an estimated $191 million will likely occur this summer is significant for an industry that has suffered greatly during the recession. The next major shutdown period for most of the plants that make up the Industrial Manufacturing Industry will be at the end of the year. If nothing else, this industry is a creature of habit, traditionally taking plants down on the 4th of July holiday and around Christmas. Hopefully, we will see similar activity planned for this winter, a sure sign of recovery in an industry that needs all the positive news it can get.
