The Performance Of The U.S. Mineral Industry

This section of Minerals and Materials analyzes the following three factors affecting the recent performance of the U.S. and world mineral industries: 1) the health of the U.S. and world economies, 2) the level of interest rates and 3) the performance of productivity in both the U.S. mineral industry and the general economy. While these indicators do not exhaust the possible critical factors, they represent an initial attempt to probe some of the considerations underlying the performance of the U.S. minerals and materials industry. The U.S. and World Economies It is essential to analyze the state of the U.S. and world economy because the demand for minerals and materials is a derived demand; that is, since minerals and materials are used in the productive process, the demand for them is a direct function of the demand for the finished products of which they are a basic input. Thus, the demand for minerals and materials is directly affected by changes in present and planned consumption and investment expenditures. The past two issues of this publication have highlighted the generally discouraging performance of the national and inter-national economies. Briefly, the world economy is in the third year of the first long recession in recent history where inflation rates have remained above 5 percent. With many countries either unable or unwilling to support domestic spending while inflation continues, there has been a growing tendency to institute trade-restrictive policies to support domestic demand. The resulting weakened demand conditions in exporting nations have had a direct effect on the mineral industry.