Optimism among manufacturers is at its lowest point in more than three years, according to the National Association of Manufacturers’ most recent Outlook Survey.
Just 65.1% of respondents said they felt positive in their company’s outlook, down from 67.0% reported during a previous version of the survey released during 2023’s second quarter. It was the fourth straight reading below the historical average of 74.9%. In addition, a tight labor market, unbalanced federal regulations and critical policy debates continue to confront the sector, according to the survey.
“Manufacturers continue to be challenged in today’s economy, but what this survey makes clear is that unbalanced federal regulations are harming families and communities, with nearly two out of three manufacturers reporting that the regulatory burden is preventing them from hiring more workers or increasing pay and benefits,” said NAM President and CEO Jay Timmons. “Congress and the administration can help correct this trend by restoring sensible regulations, enacting further permitting reforms, taking action to keep our tax code competitive and other bipartisan steps to strengthen manufacturing in America and build on the progress we achieved with tax reform, the Bipartisan Infrastructure Law, the CHIPS and Science Act and more.”
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The survey showed that 69.1% of small manufacturers and 63.2% of all respondents would hire more workers or increase compensation if the regulatory burden decreased. Concerns over an “unfavorable business climate” was the highest in six years.
More than 70% of respondents said they would purchase more capital equipment if the regulatory burden on manufacturers decreased, with 48.6% increasing compensation, 48.6% hiring more workers, 42.5% expanding their U.S. facilities and 38.4% investing in research.