SUGAR LAND, TX--(Marketwired - Sep 24, 2015) - Researched by Industrial Info Resources (Sugar Land, Texas) -- Industrial Info's most recent quarterly update to its Gulf Coast Labor Supply, Demand & Wage Rate Analysis continues to demonstrate that the U.S. Gulf Coast is the hottest region in the country for industrial project activity. The Gulf Coast region between Brownsville, Texas, and Pascagoula, Mississippi, has the largest concentration of future spending of anywhere in the country. Over the next five years, an estimated $284.3 billion will be spent in this region, compared to only $158.2 billion in spending from 2010 through 2014. Labor demand in the region has consistently increased since 2013 and is forecast to reach a peak of 183.5 million hours in 2017, representing growth of approximately 84% from 2013 levels.
Along with labor demand, peak project spending in the U.S. Gulf Coast region is also forecast to occur in 2017 and is estimated to be $64.1 billion that year, up from the previous forecast of $62.9 billion. Tony Salemme, vice president of Industrial Info's Craft Labor Group, explains: "Part of what we're seeing here is the effect of low natural gas prices on planned industrial project activity in the region. Year-to-date project fallout is higher than last year, but we're actually seeing very few cancellations or projects being placed on hold. What we are seeing is an increasing number of projects being pushed out to a later date, which is increasing planned spending and project activity in 2016 and 2017."
However, the fall in crude prices has definitely started affecting the development of some of the region's largest projects: LNG liquefaction and export facilities. "Global LNG prices are linked to crude oil pricing, and as landed LNG spot prices continue to tumble in key markets, increasing scrutiny is being applied to the current raft of proposed projects," says Salemme. "To account for this, Industrial Info applies a probability factor to these projects and only accounts for those with at least a 70% probability of moving ahead in our data analysis."
Interestingly, although on a cumulative basis labor in the Gulf Coast Region is set to peak in 2017, only two of the 11 metropolitan areas between Brownsville and Pascagoula show individual labor demand peaks that year. These zones are the Lake Charles and Baton Rouge metropolitan areas. Lake Charles, in particular, remains one of the busiest areas in the Gulf Coast region, with a forecast labor demand of more than 44.5 million craft labor hours in 2017, representing an increase of almost 13 million man-hours from 2015.