There’s good news and less-good news in a report released Friday by Bentek LLC: Industrial demand is recovering, but a return to pre-recession levels is not expected until the end of the third quarter in 2011.

“During the summer of 2009 industrial plants began to show some signs of recovery,” Bentek said in a market alert titled “Industrial Revival?”

“Total U.S. industrial demand estimates for August were down only 0.8 Bcf/d from August 2008 levels but still down 1.4 Bcf/d from levels in August 2007…Bentek estimates that the recovery to pre-recession demand levels will take several years.”

Next year total domestic industrial demand is expected to grow about 0.4 Bcf/d, followed by a similar gain in 2011, Bentek said. “These are small incremental demand increases relative to total U.S. natural gas demand, which has averaged 62.8 Bcf/d year to date,” the analysis firm said.

Since May demand from Bentek’s sample of chemical plants has increased 11%, or 84 MMcf/d; and demand from the primary metals plants in the firm’s sample has increased 78%, or 110 MMcf/d. “These gains are an indication that an industrial recovery is under way.”

History supports the premise of a slow recovery, however. “After the World Trade Center bombing on Sept. 11, 2001, the economy went into decline. Industrial production capacity utilization in September 2001 dropped 5% from levels seen in January 2001, according to statistics from the Federal Reserve,” Bentek noted. “Production capacity utilization didn’t fully recover to January 2001 levels until December 2004, nearly four years later.”

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