2024 First Quarter Manufacturers’ Outlook Survey
Manufacturers’ Outlook Survey: First Quarter 2024
The National Association of Manufacturers Q1 2024 Manufacturers’ Outlook Survey shows that the expiration of federal tax incentives related to R&D, interest deductibility and expensing for capital investments has already caused nearly 40% of respondents to pull back on hiring and investing due to increased taxes.
The latest data show that two-thirds (65.5%) of manufacturers said that rules coming from the Biden administration will be costly to implement. Additionally, amid the regulatory onslaught, concern about the overall business climate was elevated and not far from levels last seen at the end of 2016.
Overall, 68.7% of respondents felt either somewhat or very positive about their company’s outlook, edging up slightly from 66.2% in the fourth quarter. It was the sixth straight reading below the historical average of 74.8%.
The NAM conducted the survey from February 9 to February 23, 2024.
Key Findings:
- Nearly 94% of respondents say that it is important for the federal tax code to help reduce manufacturers’ costs for conducting R&D, accessing capital via business loans and investing in capital equipment purchases, with 58% saying that it is very important.
- The majority of respondents (72.4%) said that the length and complexity of the current permitting reform process affects their investment decisions in various degrees, with 38.9% suggesting that they were extremely or moderately impacted. In survey responses throughout 2023, manufacturers stated that reform to the current system could allow them to hire more workers, expand their business and increase wages and benefits.
- More than 65% of manufacturers cited the inability to attract and retain employees as their top primary challenge.
- An unfavorable business climate (58.9%), rising health care and insurance costs (58.2%) and weaker domestic economy and sales for manufactured products (53.2%) are also impacting manufacturing optimism.