02 January 2008 22:20 [Source: ICIS news]
HOUSTON (ICIS news)--US manufacturing could take a hit from rising oil prices, a spokesman for a leading industrial trade group said on Wednesday.
"We care about the price of oil," said Hank Cox, spokesman for the National Association of Manufacturers, a US trade group. "Everything that's made goes by truck eventually."
Manufacturers are also concerned about the overall US economy after oil hit the psychologically important $100/bbl level for the first time on Wednesday -- the same day as the Institute for Supply Management (ISM) said US manufacturing activity began to shrink in December due to a moribund housing market.
As the US dollar has weakened over the past year, US manufacturers have enjoyed a surge in exports but not enough to offset the downturn in house construction, Cox said.
"That's the real big weak spot in the economy," he said.
An indirect effect of higher oil is on manufacturing is that US consumers could be forced to cut back on buying goods if fuel prices continue to rise, Cox said.
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