The Rust Belt is back, says Fortune magazine's latest annual list of the 500 biggest U.S. industrial companies, which boomed to record profits and sales led by a resurgent smokestack America.
A weaker dollar is helping manufacturers battle fierce foreign competition, while economic fears raised by October's stock market crash have faded."Across the Rust Belt you can hear the sound of champagne corks popping and beer cans spritzing open: The Fortune 500 had its best year ever in 1987," the magazine said in a cover story on the annual list.
"After half a decade of sitting on the sidelines while the rest of the economy boogied, the biggest U.S. industrial corporations waltzed into the Great American Profit Party with record sales and earnings," Fortune said.
Fortune compiles the list of the 500 biggest industrial companies every year based on annual sales of the previous year. The list is in Fortune's April 25 issue, available at newsstands Monday.
Fortune said total sales of the 500 climbed 9 percent last year to $1.88 trillion, up from $1.72 trillion in 1986 and higher than the previous record of $1.81 trillion in 1985.
Profits jumped from $64 billion to $91 billion, a 41 percent increase that gave the 500 its biggest share ever of U.S. industrial profits, Fortune said.
The magazine attributed the performance to free-spending consumers unconcerned with the stock market collapse, corporate restructuring that has reduced work forces, and the weak dollar that has made U.S. goods more competitive.
The most powerful catalysts in the smokestack revival, the magazine said, were basic industries such as forest products and chemicals, which enjoyed the best advantage from the dollar's protracted decline. Among paper makers, median sales increased 17.9 percent and median profits increased 60 percent.
Profits at No. 183 Air Products & Chemicals Inc., a maker of industrial gases, rose more than 30-fold to $155.6 million, making it the biggest profit gainer on the list.