The amount of capital and maintenance project cancellations in the Chemical Processing Industry (CPI) in North America dropped 16 percent in 2006, according to research by Industrial Info Resources.
For 2006, 119 projects with a total investment value (TIV) over $2.2 billion were canceled or placed on hold, representing a drop from 2005’s 142 projects with a TIV of $3.5 billion, the research showed.
A decrease in cancellations represents a rise in planned project activity, showing the strength of CPI in North America, according to the report.
Industrial Info's research shows that the Confidence Factor for CPI is about 66.1 percent, a level that has been relatively stable for the past two years. The Confidence Factor is the measure of active and completed projects versus cancelled project activity for a five year period and determines the confidence in future projects.
Over the last year, 78 projects were cancelled and 41 were put on hold temporarily or permanently. The cancelled projects had a TIV of $1.4 billion and while many of the canceled projects were from Texas, the state still anticipates more than $1 billion in project activity for 2006 and has another $2.2 billion in future investments in 2007, the report said.
The fertilizers and agricultural chemicals segment and the pigments segment were the two areas of CPI most affected, with more than $550 million in canceled or delayed projects that had an average projected TIV of $32 million and $52 million, respectively. In 2005, $116 million in projects were canceled or delayed, according to Industrial Info.
The petrochemicals and plastics segments saw a decrease in project cancellations or delays from 2005 to 2006. In 2005, $1.5 billion in projects were affected. For 2006, it was $1.1 billion, the research showed.
