If America is going to have a real recovery in jobs, and get back to anything resembling what people think of as “full” employment, some new industries are going to have to step up and do a lot more business and hiring.
A couple of months ago, economist James Hamilton wondered: What could America be good at?
His answer: The resource sector: Mining, energy, rare earth metals, and so on.
For over a century, the U.S. produced more oil than any other country, and even today we are still the third biggest oil producer in the world. The U.S. today is the world’s leading producer of items such as lumber, corn and poultry, number 2 in coal, oranges, soybeans, and gypsum, and third in cotton and lead. Our abundant natural resources have always been an important advantage for America, and are still an important advantage today.
And it is within our power to do more with our natural resources. A decade ago, the U.S. was the second biggest producer of rare earth elements, which play a critical role in many of today’s high-tech devices and systems. But U.S. production stopped in 2002, as a result of environmental regulations and competition from cheap Chinese imports. With prices back up, U.S. production may resume.
In a note out today, Citi’s Steven Weiting also hints at big potential on this front. One thing that’s clear is that in recent years the US has staged a reversal of the big, multi-decade secular decline in mining employment.
Assuming global resource demand growth continues, and assuming that the government is mostly favourable to more resource explanation, there’s likely a lot more upside on this front.