What is becoming increasingly clear is that the nation’s booming fossil fuel energy activity is not only exceeding all recent records in this arena, but cloaking general industrial activity (manufacturing, mining, utilities) shortfalls, at levels still well under the degree of industrial production and capacity utilization reached prior to the 2008-10 Great Financial Recession.
At least the overall August 2013 results exceeded those generated a year earlier, although the manufacturing sector seems to have flattened out so far this year. This is with little indication of a meaningful pickup for the rest of this year. However, overall capacity utilization, the rate at which all manufacturing facilities operate, is only 0.6% points over any year earlier, but even a more significant 2.4 percentage points below its long run (1972-2012) average.
What is cloaking an even more severe backup in overall manufacturing activity is the red-hot “fracking activity” and continued expansion, especially in the major recently developed shale areas of Texas’ Eagle Ford and Permian Basin; along with the Marcellus Shale in Pennsylvania and Ohio (liberal New York has a moratorium against fracking) and the long-standing North Dakota-centered Bakken Belt which is approaching production of one million oil barrels daily, more than most of the world’s significant producers, with the exception of major Mideast OPEC sources, plus Russia, and Venezuela.
Despite the fact that America’s world leading refining capacity has reached new levels of output, and is adding to America’s unprecedented export growth by shipping oil derivatives, to Mexico, as well as Latin America, the output of United States plants, utilities, and mines is up-staging the current demand cycle. This accentuates businesses in holding back from spending on new plants and equipment. Their monetary expenditures are primarily targeted at increased productivity, and full-time employment cutbacks and part-time hires.
With the unresolved issue of Obamacare introduction, a potential debt increase and 2014 standoff adding to the heavy smoke of confusion darkening the unresolved litigious issues awaiting the Senate, the House of Representatives, and an indecisive White House, it’s doubtful that literally hundreds of thousands of “independent small businesses” are prepared to unzip their well-padded pocket books any time soon. With the Administration loath to negotiate on the additional ballast of Obamacare, “small businesses” are looking to a major shift of employment to the part-time sector, whose definition of less than 30 hours a week is already being contested by major labor unions.
While employment potential in the nation’s Southeast and parts of the Southwest seems hopeful going forward, an obstreperous Administration, refusing to rein in its Environmental Protection Agency extremists could make the employment picture even worse in early 2014, barring unexpected demand improvements in areas other than energy.
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