The U.S. energy boom has helped lift economic activity across the board, which in turn increased demand for electricity, energizing utilities sector stocks and related exchange traded funds.
Leo Denault, chief executive of Entergy Corp. (NYSE: ETR), is pointing to a “renaissance in the industrial south” as manufacturing activity picks up to meet a growing U.S. energy industry, reports Rebecca Smith for MarketWatch.
Consequently, the economic activity has helped foster greater demand for electricity. For instance, Big River Steel opened a $1.3 billion steel mill to melt scrap metal in Arkansas due to the inexpensive electricity produced by Entergy’s Arkansas utility.
“There are three things we need–power, power, power,” Mark Bula, Big River’s chief commercial officer, said in the article.
Entergy has seen industrial demand for electricity rise 5.3% in the third quarter year-over-year, compared to a 0.2% dip in residential sales and a 0.9% rise in commercial and government sales.
ETR makes up 2.8% of XLU, 2.1% of VPU and 2.3% of IDU.