Rising natural gas prices : impacts on U.S. industries

The impact of rising natural gas prices on the United States economy and domestic industries was examined in this PowerPoint presentation. Industry comments were solicited on the effects of natural gas prices on their business performance from 2000 to 2004 in order to collect data, and macroeconomic impacts were determined through the use of an inter-industry model. Results of the survey and subsequent model suggested that in 2000 and 2001, real gross domestic product (GDP) growth was depressed by 0.2 per cent because of higher natural gas prices. Between 2000 and 2004, the civilian workforce was lower by 489,000 jobs. It was determined that nitrogenous fertilizer manufacturing was the most gas intensive industry. The results indicated that higher natural gas prices were an additional burden on manufacturing industries, and that the economic performance of natural gas intensive industries was poor between 2000-2004. However, it was just as poor between 1997-2000, when gas prices were relatively low and stable. Natural gas intensive industries passed along price increases in their products to their downstream consumers. Despite job losses, wages in natural gas intensive industries were higher and grew faster than in the rest of the manufacturing industry in the 2000-2004 period. Although capital expenditures declined between 2000 to 2004, they declined more rapidly in the 1997-2000 period. There has been no evidence of a decline in international competitiveness of natural gas intensive industries. It was concluded that rising natural gas prices have had a significant impact on the growth of the economy and workforce. tabs., figs