One region dominates global industrial construction project pipeline

By Andy Brown03 March 2023

North America dominates the global industrial construction project pipeline, accounting for 21.7% (US$1.03 billion) of the pipeline in Q4 2022, an increase of 5.1% from the previous quarter, according to information from GlobalData.

One of the reasons for this increase in the region’s project pipeline is large-scale stimulus packages in the US that have accelerated the pipeline of industrial projects in North America.

In mid-2022, the US government passed two major stimulus packages; the CHIPS and Science Act, which will put around US$80 billion in Semi-conductor Manufacturing, and the Inflation Reduction Act, which will put US$369 billion into Energy and Security and Climate change initiatives over the next ten years, including EV manufacturing subsidies.

GlobalData’s latest report, ‘Project Insight - Industrial – Q1 2023’, reveals that the US dominates the project pipeline in North America, representing 84.9% of the pipeline, with the total value of projects amounting to US$876.2 billion.

North America now holds the world’s largest project pipeline value, above North-East Asia which has seen its pipeline contract 0.9% from the previous quarter, with the total pipeline value equating to $907.4 billion or 19.1% of the global project pipeline.

“Major project announcements in Q4 2022, such as the $12 billion Phoenix Chip Manufacturing Plant in Arizona, US, and the US$10.6 billion Mazda Electric Vehicle Production Facility in the US, have largely driven the sizable increase in the North American pipeline,” says Jack Riddleston, construction analyst at GlobalData.

Based on GlobalData’s analysis of the industrial construction projects currently in the pipeline in North America, construction spending will reach US$194.8 billion in 2023, if all projects go ahead as planned and spending is evenly distributed over the construction stage.

GlobalData is currently tracking industrial construction projects in North America with a total value of US$1.03 trillion. Projects in the pre-execution and execution stages account for 37.6% of projects in the pipeline, whereas in North-East Asia this figure is 44.8%, indicating a higher percentage of projects are in the early stages of development in North America.

“A spur in growth in the US project pipeline is largely due to ‘re-shoring’ and increased dynamism to move technology supply chains away from Asia and China in particular. Trade disputes with China and Net-Zero targets have galvanized the Biden administration to ramp up investment into green technology such as electric vehicle manufacturing and advanced technology production,” added Riddleston.

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