Ceramic Industry

Gas Price Plunge Brings Relief To U.S. Manufacturers

March 7, 2001
A 50% plunge in natural gas prices in the United States has brought much-needed relief to the nation's manufacturers, but those high fuel bills could be back by summer when energy demand peaks, and some industry leaders are already getting ready. "This drop primes the pump for manufacturing, which had been forced to cut production and lay off workers, to start getting positive growth for the second half of the year," said David Huether, director of economic research at the National Association of Manufacturing (NAM). More interest rate cuts, a recovery in consumer confidence and trimming excess manufacturing capacity will also play key roles in speeding a revival of the manufacturing sector, though it might not come until the second quarter, he said. But the halving of natural gas prices from their all-time high in December would certainly play a supporting role in any economic turnaround. NAM, in a survey released in January, said high gas prices had sent operating costs soaring, squeezing profit margins for more than 5500 manufacturers of all sizes and triggering a spate of state and federal investigations into anti-competitive practices by gas suppliers.