If trends continue along their current paths, output for the U.S. industrial sector will go through two distinct growth periods between now and 2040, according to the U.S. Energy Information Administration’s Annual Energy Outlook 2013. This "business-as-usual" projection predicts a major shift in output around 2020, based on known market, demographic and technological trends.
While industrial sector recovery has been slow thus far, growth in U.S. manufacturing output is expected to accelerate through 2022, as increased oil and natural gas production from shale resources begins to boost U.S. competitiveness. The U.S. share of world gas-to-liquid production is expected to grow consistently, increasing to 36 percent by 2040, due to recent developments in domestic shale gas supply.
Even with the expected boost in production from shale resources, output is expected to change dramatically as we move into the 2020s, especially in energy-intensive industries. According to the report, increased foreign competition and rising energy prices will play a key role in the slowdown of manufacturing output. Output will also be impacted by the economy's continued shift away from manufacturing toward service industries.
Industries such as iron and steel, aluminum, bulk chemicals and refineries are expected to be hit hardest during the slowdown. Energy-intensive industries will grow 1.8 percent per year from 2011 to 2020, but only 0.6 percent per year from 2020 to 2040, according to the scenario.
