U.S. Factories Benefit from Cheaper Oil

The Wall Street Journal recently ran an article about the impact the drop in oil prices will have on the U.S. manufacturing industry. In How Cheaper Oil Helps U.S. Factories, Timothy Aeppel asserted that the cheaper oil is creating winners and losers among America’s factories.

According to Aeppel, manufacturers that use oil and products derived from it are benefiting the most. However, companies engaged in energy development are being impacted. Producers of everything from steel pipes and valves to earthmovers are now being squeezed.

“The fall in oil definitely cuts both ways, but I see the net demand for manufacturers going up,” as it stimulates more spending in other parts of the economy, said Dan North, lead economist for North America at  Euler Hermes  Economic Research in Owings Mill, Md. He points to auto sales, which notched their strongest November sales rate since 2003 last month.

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The Experts Weigh In on a Manufacturing Revival

The Wall Street Journal recently asked three experts their opinions on the manufacturing industry. The WSJ cited new energy realities and technological developments as key factors reshaping this sector of the economy. With this in mind, the WSJ asked The Experts:  Do you anticipate a major manufacturing revival in the United States—why or why not?

While the results were mixed, the experts cited technological advances, the costs of energy, near shoring, advanced automation, and a skilled work force as key drivers in the manufacturing revival. This is consistent with feedback from O’Neal’s clients that are investing in capital projects to expand their manufacturing footprint in the United States.

Most importantly, manufacturing still matters to the United States. As the article points out, manufacturing is a $2.08 trillion industry domestically.

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