Energy costs number one barrier to US industrial growth: Survey
Washington (Platts)--1Jun2005
The number one barrier to US manufacturing growth in the coming year is high energy prices, according to a survey of industrial executives released Wednesday by accounting firm PricewaterhouseCoopers. Nearly half--47%--of manufacturing executives surveyed said the high prices of oil and other energy products would hamper growth while more than half--59%--are passing those costs on to customers. While 89% of the executives surveyed believe the US economy is growing, 41% say their profit margins are shrinking due to energy prices. "Prices affect industrial manufacturers on multiple fronts," PwC's US industrial practice leader Jorge Milo said. "Raw material prices go up, energy costs increase to operate their facilities, and distribution costs rise to transport their products to customers." Milo said manufacturing executives face a tough decision trying to decide how much of their energy costs can be passed along. "Tightening margins indicate that end markets will only absorb so much. It's a delicate balancing act," he said. This story was originally published in Platts Electricity Alert http://www.electricityalert.platts.com
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