A look ahead at the maintenance work currently planned for industrial plants for the fourth quarter of 2006 shows a 25 percent decline in overall spending when compared to 2005, according to a report by Industrial Info Resources (www.industrialinfo.com). Traditionally, maintenance shutdowns or turnarounds within the industrial manufacturing industry occur during July and December, two months that have major holidays that make it convenient for facilities to shut down for a period of time and perform routine maintenance.
Industrial Info Resources’ data shows that 80 maintenance projects worth $236 million were planned in the United States during the fourth quarter of 2005. In the fourth quarter of ‘06, the research firm says that while there are more projects currently planned, almost 100, the overall spending for the quarter has dropped to $175 million.
According to Industrial Info Resources, the decline is primarily due to the struggles of the U.S. automotive industry. As the U.S. automakers and their suppliers look for ways to cut cost to better position themselves against foreign competitors, many have decided to push their December maintenance schedule back to July of ’07. Meanwhile, Industrial Info Resources says foreign automakers and their suppliers are basking in the light of increasingly favorable marketshare and are continuing to spend whatever is necessary to perform routine maintenance to keep their plants running at optimum levels.
Faced with such a difference in approach, Industrial Info Resources says the American automotive industry’s decision to cut maintenance spending may backfire if a lack of routine maintenance leads to equipment failures and a rise in more expensive replacement costs.
Industrial Info Resources’ data shows Illinois will be spending the most on maintenance this winter at $26 million followed by Tennessee at $23 million, Michigan at $19 million, Indiana at $17 million, and Ohio at $13 million.