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Construction Components

Building materials and other key industries have
plenty of room to expand in the U.S. Southwest.

Downtown Phoenix
Greater Phoenix reported a 2003 Gross Metropolitan Product of US$129.1 billion, the 13th-highest in the U.S. The metro's August 2005 unemployment rate was 4 percent.



s if demand for building materials weren't already robust, the 2005 hurricane season has given that industry added momentum, with rebuilding efforts now in full swing on the U.S. Gulf Coast.
   One region benefiting from this activity is the Southwest, where building materials suppliers are investing in new facilities to meet domestic and international demand. Even if demand slows in the U.S. — which could easily happen as higher energy costs sap more of consumers' discretionary income, and with it their interest in heating more living space in larger houses — rapidly growing markets like China will keep the sector active. Manufacturing employment growth in the Southwest is at or above the national rate and is climbing (see the charts provided for the three states covered in this report).
   Nevada, New Mexico and Arizona all are seeing investment on the part of building materials manufacturers, as well as in other key industries, such as aerospace, medical devices, semiconductors and food processing, to name a few. But access to the booming Texas market as well as California and its ports serving Pacific Rim destinations makes these states ideal locations for companies supplying industrial and residential developers.
   Merillat Industries LLC, a kitchen cabinet maker, is investing US$67 million in a new manufacturing facility in Los Lunas, N.M., which will commence production in early 2007. The company also owns plants in Las Vegas and several other U.S. locations. Las Vegas also is the location of a new insulated steel panel production facility being built for Lewisville, Texas-based Metl-Span, a U.S. subsidiary of Mexico's IMSATEC, which exports steel, plastic and aluminum products worldwide. The Nevada facility will serve the western United States; other Metl-Span plants are located in Texas and Virginia.
   "Our production facilities in the west, east and central region of the United States position us to serve the country's largest markets rapidly and efficiently," says Benjamin Clariond, IMSATEC's president.
Manufacturing Employment Chart, New Mexico
   Site Selection magazine's proprietary New Plant database indicates several other recent building-materials-related investments in the region in 2005. These include an expansion of Northern Industries' fabricated and tempered glass production facility in Yuma, Ariz.; an $11-million investment in Alside's window manufacturing plant, also in Yuma; and a furniture manufacturing plant for APA Marketing in Henderson, Nev., one of the fastest growing communities in the West.
   Bigger-ticket investments may not be as plentiful, but they are no less significant to the region's economy. These can be found in the high-tech industry, such as semiconductor manufacturing.
   As was reported in Site Selection's September 2005 issue, Intel is investing $3 billion in its Chandler, Ariz., campus to build a new wafer fabrication plant near where another is about to come online. And in Albuquerque, N.M., the PhotoVoltaics unit of Emcore Corp. is building a solar panel manufacturing facility for the satellite and terrestrial markets. Emcore produces compound semiconductor-based components and subsystems for the broadband, fiber optic, satellite and wireless telecommunications markets. Emcore is consolidating operations at Albuquerque, moving the solar panel manufacturing operation from City of Industry, Calif. The consolidation will save Emcore about $3 million annually.
Manufacturing Employment Chart, Nevada

   "Our modern wafer fabrication line in Albuquerque employs state-of-the-art manufacturing methods, which will be applied directly to the solar cell assembly and panel manufacturing operations," noted David Danzilio, vice president and general manager of the PhotoVoltaics division, when the consolidation was announced in April.
   Back in Arizona, a major new development is under way in Scottsdale that will be the largest project ever built on Native American land in the country. The Alter Group is developing a $400-million mixed-use office/retail development on 187 acres (76 hectares) of land owned by the Salt River Pima-Maricopa Indian Community.

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©2005 Conway Data, Inc. All rights reserved. SiteNet data is from many sources and not warranted to be accurate or current.