Energy and Electronics
Energy is Leading American Manufacturing; Electronics Receives Reshoring Support
Energy is Leading American Manufacturing
Energy may be the strongest part of the American economy. In recent years there have been significant new finds of oil and natural gas. Because of these finds and the high price of oil, there was significant investment by the oil and gas industry in capital equipment in 2010, and such spending should ramp up again in 2014. This is partly due to the fact that the price of oil is starting to grow again, which should lead to growth in the production of equipment used to get oil and gas out of the ground.
But perhaps a more significant reason for continued investment in energy is the relative price difference between oil and gas per BTU. Currently, oil is very expensive per BTU relative to natural gas. While there has been a great deal of investment to get natural gas out of the ground, much of the natural gas being produced is simply being burned off. However, the relatively low cost of natural gas should spur a great deal of investment in American manufacturing for its use. The U.S. needs new pipelines, trucks and tanker cars to move the natural gas around the country. Port facilities need to be built for possible natural gas exportation. Then there is investment to convert those goods that run on oil to run on natural gas. In 2014, our surveys show that there will be significant investment by pipe, pump and compressor manufacturers.