Is Now the Time to Start Planning New Investments?

photo : Germanhistorydocs

Although contractors are seeing an increase in the number of requests for proposals, the scale of projects is nothing like those seen just a few years ago. Large scale projects are just not being initiated just now, but arguably this may be a very good time to start to invest wisely.

Engineering contractors are seeing changes in demand patterns, as we move into the “new normal”. The scale of projects is nothing like those seen just a few years ago. But arguably next year may be a very good time to invest wisely, now that costs have come down to more sensible levels.

  • Current demand for chemicals has been buoyed by the stimulus packages in place around the world.
  • As these packages end (e.g. in autos), uncompetitive manufacturing assets will again come under increased pressure
  • Cost pressures coming from climate change related legislation will also make things tougher for older and less efficient plants
Supply and demand will start to rebalance to some extent and although this will be offset by the wave of new capacity coming on stream in the Middle East and Asia, some opportunities will be created.

Although there are differing views on the speed and shape of the recovery, we remain in a cycle and the upcycle will come in the next few years. Many analysts are predicting a next peak somewhere around 2013-2014.

The combination of these factors means that any new investment has to be made judiciously and in the right market sectors. Given that new plant takes typically 3-4 years to complete, now is probably the smart time to start selectively investing in new, efficient and 'green' assets.

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