Promising outlook seen for North American construction industry

By Stephany Romanow

Rice Global E&C ForumHOUSTON -- Conditions have changed for the engineering and construction (E&C) industry, especially in North America. That was the consensus of attendees at the 16th annual Rice Global Engineering & Construction (E&C) Forum, held this week at Rice University.

The theme of the conference was getting ahead of the curve and adapting to the accelerated pace of changing pace in the E&C business.

The good news is that a reversal in project bookings is under way. Previously, new construction projects were predominately located outside of North America. However, as the full effect of the shale gas and oil wave continues, North America is now the location for new major E&C projects.

Mike McAtee, senior vice president with BASF, believes geography is part of the present uptick in construction activity. But other factors are involved, especially for the downstream. Low energy prices stemming from the abundant shale gas supplies are keeping prices very low. Likewise, cheap natural gas supports expansion of the North American petrochemical and chemical industry.

“Experience matters,” said Keith Manning, executive vice president at Zachry Holdings, Inc. in San Antonio. During the lull in petrochemical projects, US E&C companies have been involved in other major projects such power projects. Many of the experiences from constructing coal or natural gas fired-power plants can be transferred to refining and petrochemical projects.

The shale wave is also facilitating new E&C firms to enter the US market. Keith Claus, president and CEO of SK E&C, shared that international E&C companies view North America as a very favorable location to conduct multi-billion-dollar, lump-sum turn-key projects. SK E&C, as one of those companies, is considering North America as an option to employ its global workforce as opportunities in the Middle East dwindle.

For more information about Rice E&C Forum activities, please visit the forum's website.