In One Year The US Mining Industry Lost More Money Than It Made In The Prior Eight
Mining corporations with assets of $50 million or more recorded a collective $227 billion after-tax loss last year, according to Commerce Department data released Monday. That one year loss wipes out all the profits the industry had made since 2007, or almost a full decade worth of profits, gone in 12 months.
It wasn’t just shale drillers: other types of mining operations were stung by falling commodity prices tied to weak demand from China and other parts of the globe. Mining revenues also fell sharply, down 38% in the fourth quarter from a year earlier.
The faltering global economy also stung the manufacturing sector: as the WSJ notes, manufacturing revenue declined 7.8% in the fourth quarter from a year earlier, meaning dropping global demand for U.S.-made goods, which is nowhere more obvious than in Caterpillar’s impploding retail sales.
Finally, the WSJ hedges by saying that the declines come despite steady, if unspectacular, demand on the part of U.S. consumers. “Retailers’ revenue grew 1.5% in the fourth quarter from a year earlier. Annual revenue growth was between 1.5% and 2% all of last year. Retail sales tend to match up with other measures of consumer demand.”
One wonders how much longer the retail sector can sustain the headwinds from the manufacturing collapse if oil fails to rebound strongly back to where it needs to be for profitability to return to the mining sector, somewhere well north of $50.
