Industrial Insight

Manufacturing declines | July 31, 2015

Bottom Lines Leveled by Commodity Price Declines Mining companies reported a $37.6 billion after-tax loss in Q1 2015, according to the Census Bureau’s Quarterly Financial Report (top chart). This was even more significant than the losses seen in the depths of the prior recession, and comes on the heels of an after-tax loss of $16.3 billion in Q4 2014. Net sales fell 26 percent from a year earlier to $69.3 billion, the lowest quarterly reading in nearly four years. While we expect a gradual stabilization in oil prices in the coming quarters will make future losses for the sector less dramatic, a return to the heady pace of profit growth seen in prior years does not seem likely in the near future. Primary metals also fell into the red in the prior two quarters, recording back-to-back after-tax losses of $1.1 billion. Margins in this sector were likely hit by the sizable decline in prices for most industrial metals, which has largely been overshadowed by the collapse in oil prices. Bloomberg’s industrial metals index is down more than 25 percent since last summer.

Advertisements

Posted in Uncategorized

Leave a Comment »

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: