Overview
fuel costs for new cars, providing an incentive for consumers to purchase new vehicles. In the five years to
2018, revenue for the Au- tomobile Engine and Parts Manufacturing industry (IBISWorld report 33631) is anticipated to increase at an annualized rate of 3.0% to $35.2 billion, due to low energy costs and growing consumer demand. Other auto sector manufacturers, such as the Automobile Transmission Manufac- turing industry (33635), the Automobile Interior Manufacturing industry (33636) and the Automo- bile Metal Stamping indus-
Chemical manufacturing is a highly energy-intensive
process. Crude oil is used as an input and electricity is used to power a variety of machinery and equipment. Plum- meting natural gas prices bolstered a surge in natural-gas- generated electricity over the past five years, which helped lower the price of industrial-use electricity. In the coming years, cheap natural gas is projected to keep electricity prices anchored, stimulating growth and improving profit- ability for chemical manufacturers. In the five years to 2018, inorganic chemical manufacturing revenue is forecast to grow at an annualized rate of 4.1% to $45.2 billion, due to growing domestic manufacturing production and low energy prices. Over the same period, organic chemical manufacturing revenue is anticipated to expand an average 4.5% per year to $163.5 billion, and petrochemical manu- facturing revenue is projected to increase 3.5% per year on average to $98.9 billion.
Auto Manufacturing Te automobile manufacturing sector, which includes
firms that manufacture all related parts and components, struggled in recent years with a slow recovery from the recession. However, the economic recovery and low energy prices will help auto manufacturers return to growth over the next five years. Automakers were some of the earliest adopt- ers of industrial robots, and continued advances in robotics, combined with cheap electricity, will allow manufacturers to further expand energy-intensive automation technology. In addition, the rise of fuel-efficient vehicles and hybrid engines, along with slow-growing oil prices, will significantly lower
14 Energy Manufacturing 2013
try (33637) are also forecast to recover strongly. On average, IBISWorld forecasts that automobile sector revenue, including motor vehicle manufacturers and vehicle parts manufactur- ers, will grow at an annualized rate of 2.6% over the next five years. Te auto sector’s share of total domestic manufacturing is anticipated to increase from 8.1% in 2013 to 8.2% in 2018.
Manufacturing Outlook In the five years to 2018, IBISWorld forecasts that the
domestic manufacturing sector’s revenue will grow at an an- nualized rate of 2.4%, reaching prerecession levels by 2014. Firms will be able to invest in energy-intensive machinery and equipment, such as automated production lines, robotics, computer systems and other labor-saving technologies. As a result, domestic manufacturers can remain profitable while competing on price in international markets. In addition, emerging economies will likely continue to grow strongly, bol- stering their per capita disposable income levels. Demand for US exports will subsequently increase, fueling revenue growth for domestic manufacturers.
High Energy Price Scenario While energy prices are projected to remain anchored in
the coming years, there are always risks stemming from geo- political events. For instance, escalating tensions in the Middle East may cause spikes in oil prices by limiting global supplies. Additionally, oil and gas extractors located in the US and Canada have accelerated pipeline construction in an attempt to alleviate the flood of crude oil in Cushing, OK. Currently, TransCanada’s Cushing MarketLink pipeline is scheduled for
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