NEWTON, MASS. — Fuel costs are rising quickly and there could be no letup, depending on the outbreak of war with Iraq and other factors, Thomson First Call reported in early March. Manufacturers, especially those using large amounts of electricity to power factories, face rising costs at an inopportune time.

Companies that must heat metals to high temperatures are particularly vulnerable.

The input of new orders is precarious at best, and earnings are flat throughout the hard goods sector. Manufacturers can't seem to maintain a sustained upward swing despite several months in which the Purchasing Managers Index showed an expanding industrial economy.

Higher oil prices mean higher gasoline and home heating prices, and those affect the all-important consumer spending numbers, reports from across the nation said.

Many manufacturers have plans in place to counteract, or at least battle, rising energy costs. Since 1978, when shortages drove prices up and caused long waiting lines for gasoline, companies began putting energy conservation and emergency procurement plans into place. Over those years, engine and motor suppliers worked hard to make their products more efficient.

There's more bad news. UPS raised its fuel surcharge on packages from one-and-a-quarter percent to one-and-a-half percent, according to reports. Trucking companies are expected to follow suit. Transportation charges — along with packaging costs — are a large percentage of the overall cost of goods delivered to consumers and are closely watched by industry accountants.

According to statistics from the American Petroleum Institute, oil and natural gas supply 62 percent of the nation's energy, but legal roadblocks and lack of funding for new technology make raw material extraction difficult in newly discovered domestic reserves.

While only 2.3 percent of oil imports in 2002 came from Iraq, reports that Saddam Hussein's regime had wired oil fields with explosives in March added to concerns about Middle Eastern oil supplies in general. This fueled further worries about future supplies, although API noted that a cutoff of supplies from Iraq could probably be offset by increases in imports from other countries.