Energy & Utilities October 2011

Global CAPEX & Maintenance Forecast

Revised Using 2011 Model

Global CAPEX & Maintenance Forecast

Global CAPEX & Maintenance Forecast

Arthur D. Little’s energy practice forecasts growth in Global CAPEX and maintenance spending of 3.8 per cent CAGR from 2011 to 2016 with most of the growth driven by new investments in exploration and production.

By 2016 we predict that spending on new-build facilities in selected energy-based industries will increase by 3.8% CAGR, with maintenance spend showing overall growth of 4.1% CAGR to 2016 with most of the growth coming from outside Europe and North America. Our overall global forecast for growth for specific maintenance consumables used in new-build and maintenance suggests a CAGR of 4.2% with the strongest growth coming from the petrochemical and E&P segments and the Middle East, Asian and Latin American markets showing the strongest growth opportunities. In contrast, ADL forecasts that the market for consumable products in Europe and North America will experience relatively weaker growth of 3.1%-3.4% CAGR over the period 2011 to 2016.

This market research note presents Arthur D. Little’s recent forecasts for global expenditure in four key process industries for capital expenditure, maintenance and spending on specific consumable products. The research was carried out in spring 2011 and reflects exchange rates and built-in expectations of energy prices around this time1. For the power generation market, we have adjusted our forecasts to reflect the impact of recent changes in, and future expectation of, nuclear power generation and recent changes in the cost of construction.

The model was developed to estimate growth in global CAPEX, maintenance and inspection activity and the associated market demand for the types of products that are generally used during construction and replaced during maintenance in process industries, which could be termed specific maintenance consumables. These classes of products typically include items such as: gaskets, “o” rings and other static seals and compression fittings, tubings, and filters that are typically replaced as part of maintenance. Throughout this note, the term consumables refers to this group of products.

The forecasts are based on CAPEX and maintenance estimates for these products and cover the following four industries:

  • exploration and production in the upstream oil and gas industry
  • refining
  • chemical
  • power generation

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