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Petroleum

Industrial Economy Continues to Grow Despite Rising Prices

Strategic Insights

— 2 min read

The National Association of Purchasing Management reported that the industrial economy grew in March, although at a lower rate than in February, despite rising prices for energy and industrial raw materials. The prices of these materials increased at their fastest rate in five years, causing concern among manufacturing executives. The growth in the industrial economy is a positive sign, but the increasing prices may dampen business in the future.

Key Takeaways:

  • The National Association of Purchasing Management reported that the industrial economy grew in March, but at a lower rate than in February.
  • Prices for energy and industrial raw materials rose at their fastest rate in five years, causing concern among manufacturing executives.
  • 17 of 20 industries reported higher prices for supplies, with a particular focus on fuel and transportation.
  • U.S. automakers saw mixed sales results in March, with Ford Motor Co. experiencing an increase in sales and General Motors Corp. reporting flat results.
  • The strong economy and price competition among automakers are pulling buyers into showrooms despite higher interest rates and gas prices.
  • Blue Cross and Blue Shield of Texas finalized its purchase of Aetna's NYLCare Health Plans in Texas, which will do business as HMO Blue Texas.
  • Sega is making an aggressive push into the online video-game market with the launch of its new Sega-brand Internet service provider, SegaNet.
  • Anadarko Petroleum Corp. is buying Union Pacific Resources Group Inc. for about $4.4 billion in stock.
  • Credit insurance rates have dropped, but consumers should still be cautious of claims that they must buy the product along with financing on a new car or furniture.

Statistics:

  • The industrial economy grew in March at a lower rate than in February.
  • Prices for energy and industrial raw materials increased at their fastest rate in five years.
  • 17 of 20 industries reported higher prices for supplies.
  • Ford Motor Co. saw a jump in sales, while General Motors Corp. reported flat results.
  • The strong economy and price competition among automakers are pulling buyers into showrooms despite higher interest rates and gas prices.
  • Blue Cross and Blue Shield of Texas has approximately 58,800 members (43,000 from NYLCare and 15,800 from Rio Grande HMO Inc.).
  • Anadarko Petroleum Corp. is buying Union Pacific Resources Group Inc. for about $4.4 billion in stock.
  • Credit insurance rates decreased by 21 percent on April 1.

Sources:

  • "Private Report" by the National Association of Purchasing Management
  • Statement by Norbert J. Ore, head of the purchasing agents' survey committee
  • Announcement by Blue Cross and Blue Shield of Texas
  • Press release by Sega Enterprises Ltd.
  • Announcement by Anadarko Petroleum Corp.
  • Statement by the Texas Department of Insurance

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