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Cheap gas fuels US manufacturing surge

Editorial

The United States’ so-called “manufacturing renaissance” has been credited by some as being linked to the boom in shale gas, and recent anecdotes have provided some support for this.

CNBC reports that the “breakneck expansion” of the US’s energy sector has been feeding the country’s manufacturing sector growth.

According to the Institute for Supply Management, the United States’ manufacturing sector (which contributes about 11 per cent of the country’s GDP) grew at the fastest rate in 30 months for November.

There have also been a number of high-profile “onshoring” announcements recently, such as Apple declaring that it would open a factory in Arizona, as well as examples for GE and Caterpillar.

Incitec Pivot cited affordable energy in its decision to open an ammonia factory in Louisiana earlier this year.

IHS, a research firm, claimed that the energy boom contributed $283 billion gross to GDP last year and 2.1 million American jobs.

"The rise in production generates a tremendous amount in operating spending," an analyst at IHS, Mohsen Bonakdarpour, told CNBC.

"There definitely is a manufacturing story in all of this."


Image: http://www.romania-insider.com/

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