Investment in process industry plant is set to decline after five years of growth, according to forecasts by market research firm MBD.
The biggest decline will be in the oil and gas sector, where spending on plant is expected to fall from £1.45bn last year to £470m by 2003. This is largely due to a shift from fixed to floating platforms, which cost less to set up.
The chemicals sector was the largest process industry spender in 1998, investing a total of £2.08bn in plant. This figure is expected to decline by nearly a quarter over the next three years, but will recover in 2003.
The reduction in investment will be driven by the need to avoid overcapacity in a highly cyclical industry, according to MBD.
The only stable process industry market is likely to be food and drink, which is expected to invest in more hygienic processing equipment.
* Wind and solar power sources grew substantially last year. The world’s total wind generation capacity increased from 7.4gW to 9.6gW, while photovoltaic cell sales rose 20%.
However, nuclear remains the largest non-carbon energy source, with about 40 times the generating capacity of wind power.