UK plant spending 'set to increase'
15 Jan 2000
Growth is expected to have returned to the process plant sector in 1997, following several years of decline, according to a new report from market researchers Market and Business Development (MBD).
Process plant expenditure dropped in 1993 and 1994, rose marginally in 1995 and held steady in 1996, says MBD. However, the company estimates growth of 6 per cent for 1997, taking expenditure up to £6.9 billion.
The leading sectors were oil and gas production (a 10 per cent increase to £1.3 billion); water and sewerage (a massive 69 per cent increase to £887 million); and the gas industry (up 9 per cent, but following several sharp declines). The food and drink sector's spending dropped 4 per cent to £1.7 billion, its lowest level since 1994, and MBD expects to see further declines in the coming year as higher interest rates begin to bite.
The chemicals sector is showing marked fluctuations: a 5 per cent rise in 1997, to £1.9 billion, will be followed by a decline to £1.6 billion by 2000 and then an increase to £1.7 billion by 2002. 'Rather than reflecting a downturn in chemical demand, this is expected to reflect a commitment by the chemicals industry not to excessively invest in an upturn, with a potential overcapacity during a downturn,' MBD comments.
Like much of British industry, however, the sector was held back by the strength of sterling.
* 'UK process plant market development', £295, MBD, 121 Deansgate, Manchester M3 2BX
