General

Washington, D.C. – National Association of Manufacturers President and CEO Jay Timmons issued the following statement thanking President Donald Trump and Secretary Scott Bessent for achieving a monumental deal with G-7 allies that the OECD Pillar 2 taxes will not apply to U.S. companies, laying the groundwork to remove the harmful Section 899 proposal from the pro-manufacturing One Big Beautiful Bill Act:

“In a massive triumph for manufacturing in America, Treasury Secretary Bessent announced a deal to protect both domestic and foreign-headquartered manufacturers investing in the United States from oppressive, job-killing taxes. The NAM—which yesterday brought together manufacturers of all sizes to meet with Deputy Secretary Michael Faulkender to discuss the importance of countering OECD Pillar 2 and preventing the harm of Section 899—congratulates President Trump for this outstanding deal.

“Today’s deal is a win for manufacturing and a win for America. Manufacturers thank Secretary Bessent, Deputy Secretary Faulkender and the Trump administration for reaching this historic deal to shield manufacturers in America from damaging foreign taxes that unfairly stifle job creation in the U.S.

“Manufacturers have long raised concerns about the overreaching and extraterritorial nature of OECD Pillar 2. We greatly appreciate Chairman Jason Smith and Chairman Mike Crapo for their commitment to defending manufacturers in the U.S. from discriminatory foreign taxes. Companies of all sizes across our industry will benefit from the Trump administration removing the threat of these damaging tax burdens.

“Today’s announcement also paves the way for the House and the Senate to lift the threat that Section 899 poses to foreign-headquartered manufacturers’ ability to invest and create jobs in America. Manufacturers have been working with Congress to ensure that the One Big Beautiful Bill Act is maximally beneficial for manufacturing investment in America, and today’s announcement is a crucial step in that direction.

“It’s now time for the Senate to vote and for the House to send this bill to President Trump’s desk by July 4.”

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.93 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

Building permits fell 2.0% in May and 1.0% over the year. Permits for single-family homes in May declined 2.7% from April and 6.4% over the year. Meanwhile, permits for buildings with five or more units increased 1.4% from April and 13.0% over the year.

In May, housing starts decreased 9.8% from April and fell 4.6% from May 2024. Starts for single-family homes were largely unchanged from April, rising just 0.4%, but they dropped 7.3% from May 2024. On the other hand, starts for buildings with five or more units plummeted 30.4% over the month but rose 5.0% over the year.

Meanwhile, housing completions increased 5.4% over the month but slipped 2.2% over the year. Single-family home completions rose 8.1% from April but were similar to the May 2024 level, up just 0.1%. Completions for buildings with five or more units ticked up 0.2% over the month but fell 6.7% from one year ago.

U.S. import prices stayed the same in May, after rising 0.1% in April, with higher nonfuel prices offsetting lower fuel prices. Over the past year, import prices inched up 0.2%. Meanwhile, U.S. export prices decreased 0.9% in May, with lower nonagricultural export prices more than offsetting higher agricultural export prices. Over the past year, export prices increased 1.7%.

In May, U.S. import prices for manufacturing rose just 0.6% over the year, but there were significant divergences in prices across the industry. Petroleum and coal products manufacturing experienced the most significant U.S. import price declines in May, falling 20% over the year. On the other hand, the greatest increase in U.S. import prices in May occurred in primary metal manufacturing, which rose 11.2% over the year. Meanwhile, U.S. export prices for manufacturing in May increased 2.5% over the year.

Fuel import prices fell 4.0% over the month in May, the largest monthly decline since falling 7.2% in September 2024. Lower prices for natural gas and petroleum drove the decline. Prices for fuel imports plummeted 15.7% from May 2024, the largest over-the-year decline since September 2024. Import prices for petroleum decreased 3.7% over the month in May and 17.4% from last year. Meanwhile, natural gas prices plunged 9.0% in May but jumped 88.4% over the year.

Nonfuel import prices increased 0.3% in May, after rising 0.4% in April. Higher prices for nonfuel industrial supplies and materials, capital goods, consumer goods and automotive vehicles more than offset declines in foods, feeds and beverages. The price index for nonfuel imports grew 1.7% over the past year, led by higher prices for nonfuel industrial supplies and materials; foods, feeds and beverages; capital goods; and automotive vehicles.

After improving 0.4% in April, agricultural export prices rose 0.2% in May. Over the past 12 months, agricultural export prices increased 1.8%. Meanwhile, nonagricultural export prices slid 1.0% in May. Lower prices for nonagricultural industrial supplies and materials more than offset higher prices for capital goods, consumer goods and automotive vehicles. Over the past year, nonagricultural export prices advanced 1.7% and have not declined on a 12-month basis since September 2024.

Manufacturing activity in New York state continued to decline in June. The headline general business activity index worsened from May, falling from -9.2 to -16.0. Meanwhile, the new orders and shipments indexes contracted after growing the previous month, with new orders decreasing from 7.0 to -14.2 and shipments declining from 3.5 to -7.2. Unfilled orders also declined 13.1 points to -8.3, while delivery times inched up from 1.0 to 1.8. Inventories fell from 4.8 to 0.9, but supply availability improved from -11.4 to -8.3.

The index for the number of employees rose into positive territory, improving from -5.1 to 4.7, while the average employee workweek improved but remained negative, rising from -3.4 to -1.5. Input prices ticked down 12.2 points to 46.8 after reaching the highest level in two years last month. Meanwhile, selling prices rose from 22.9 to 26.6 points, a reflection that prices paid increased at a slower pace while the pace of prices received quickened.

Looking forward, firms’ expectations vastly improved after a gloomy outlook in May and April. The index for future business activity turned positive, rising 23.2 points to 21.2. New orders are similarly expected to increase, with the forward-looking indicator rising from -2.7 to 26.1. Nevertheless, capital spending plans fell further into negative territory, dropping 0.6 points to -7.3. Employment expectations also ticked down from 11.6 to 10.4, while the average employee workweek outlook strengthened but remained negative, rising from -4.8 to -1.8. Input prices are expected to remain high but retracted slightly from 66.7 to 59.6. On the other hand, selling price expectations rose 6.1 points to 41.3. Meanwhile, supply availability is still forecasted to contract in the next six months but at a slower pace than predicted in May.

In June, Philadelphia’s regional manufacturing activity remained weak. At -4.0, the index for current general business activity stayed the same as May. Over 28% of firms reported decreased activity this month, while 24.5% saw increases in June, an improvement from the 19.0% reporting increases in May. The index for new orders declined but remained positive, slipping from 7.5 to 2.3. On the other hand, the shipments index jumped into positive territory, rising from
-13.0 to 8.3. Nevertheless, new orders and shipments both remain below their non-recession averages. Meanwhile, employment fell into negative territory, declining from 16.5 to -9.8, the lowest reading since May 2020.

The prices paid index dropped from 59.8 to 41.4, the lowest reading since February. The prices received index also fell, from 43.6 to 29.5. As has been the case for many months, the prices received index remains lower than the prices paid index, indicating manufacturers have been absorbing a portion of those higher costs paid.

Looking ahead, indicators showed expectations for future growth have dimmed from the previous month. After soaring more than 40 points in May, expectations for future general business activity plummeted nearly 29 points to 18.3 in June. A lower proportion of firms (45.1%) expect increases in activity, compared to last month’s reading of 67.3%, while 26.8% anticipate activity will decline. Similarly, the future new orders index declined from 49.7 to 22.1, and the future shipments index weakened from 51.1 to 27.9. The capital expenditures index declined from 27.0 to 14.5. The future prices paid and future prices received indexes both edged up from 61.6 to 68.9 and 50.0 to 52.5, respectively. Nonetheless, the index for future employment remained stable, ticking up from 23.0 to 24.6.

Industrial production slipped 0.2% in May. Meanwhile, manufacturing output ticked up 0.1%. Growth in motor vehicles and parts, apparel and leather and aerospace and miscellaneous transportation equipment more than offset declines in printing and support, nonmetallic mineral products and petroleum and coal products. At 103.6% of its 2017 average, total industrial production in May rose 0.6% from the same month last year. Capacity utilization slipped to 77.4%, down 0.3 percentage points from April, but up 1.4% over the past year. Capacity remains 2.2 percentage points below its long-term average from 1972 to 2024.

In May, major market groups had mixed growth. Among consumer goods, the production of durables increased 2.0%, with the greatest improvement in automotive products (3.9%), while the index for nondurables edged down 0.8%, with the greatest drop in energy goods (-3.2%). The business equipment index advanced 0.8% in May due to a 6.4% increase in transit equipment.

Durable goods manufacturing picked up 0.4% in May, led by growth in motor vehicles and parts (4.9%) that offset decreases in nonmetallic mineral products (-1.6%) and fabricated metal products (-1.2%). Meanwhile, nondurable goods manufacturing decreased 0.2% in May. Manufacturing capacity utilization stayed the same at 76.7%, remaining 1.5 percentage points below the long-term average.

From personal heroes to tax reform and tariffs, NAM President and CEO Jay Timmons covered it all in his recent appearance on iHeart Radio’s “CEOs You Should Know.”

From the beginning: In his June 9 interview with show host Mike Howard, Timmons told listeners about his journey from a childhood in the mill town of Chillicothe, Ohio, to his current role, running the largest manufacturing trade association in the U.S.

• As both the only child and the only grandchild in his family, Timmons was inspired professionally and personally by his parents and grandparents.
• Timmons’ grandfather “stood in line for six months during the Great Depression trying to get a job in manufacturing because he knew that that would be a way forward for his family,” he said.
• His mother climbed the ranks at the Chillicothe Gazette, eventually becoming president and CEO of the newspaper, and his father owned an appliance store, Timmons Appliance and TV.

Part of the Reagan Revolution: As an undergraduate student at Ohio State University, Timmons decided that college wasn’t for him—and he wanted “to do everything I could to help Ronald Reagan succeed.”

• So, he headed for Washington, D.C., where he ended up on Capitol Hill. His desire to enter politics “was really about [wanting to help shape] policy that enabled people to live their best lives.”
• Timmons ended up becoming the youngest chief of staff in the U.S.—to Virginia Gov. George Allen.

The road to manufacturing: Later, Timmons took over the policy and government relations team at the NAM, where he spent six years shaping the association’s agenda before being named CEO in 2011.

• “[M]anufacturing is not a partisan issue, and [neither is] the success of America,” Timmons continued. The industry “is really infused into the fabric of all we are as Americans. … [M]anufacturing helped us to build the infrastructure system that made us the strongest, most connected economy in the world in the 1950s and ’60s.”

Rocket fuel: From 2018 to 2022, manufacturing “had record investment, we had record hiring, and we had record wage growth over the course of the next three years—because of that rocket fuel, as President Trump called it,” the Tax Cuts and Jobs Act of 2017.

On tariffs: The manufacturing industry in the U.S. is hoping the administration and its trading partners will make trade deals during the current three-month pause on tariffs.

• “[M]anufacturers … are very hopeful that the administration really is going to be able to settle in their 90-day window all of these potential trade agreements throughout the world,” he said, adding that it would mean that “manufacturers actually can have the certainty they need to again invest higher and increase wages and benefits.”

While the labor market is holding steady, it’s not a good time to be looking for a job—particularly if you’re young (The Wall Street Journal, subscription).

What’s going on: “Recent college and high school graduates are facing an employment crisis. The overall national unemployment rate remains around 4%, but for new college graduates looking for work, it is much higher: 6.6% over the past 12 months ending in May.”

• That’s the highest level for this age group in a decade, not counting the COVID-19 unemployment increase.
• By contrast, jobseekers aged 35 to 44 with bachelor’s degrees had a 2.2% unemployment rate over the past year.

What’s different now: “Young graduates typically face a higher unemployment rate than their counterparts who have been in the workforce longer, but the gap is growing wider between older workers and the young.”

Why it’s happening: There’s a general slowdown in hiring right now.

• While it hasn’t had much of an effect on people who already have jobs (because layoffs have stayed low), it has hit those with the least experience.
• “With employers turning more cautious on hires, they are less inclined to gamble on workers with thinner résumés or skill sets.”

Worse for high school grads: “High school graduates ages 18 to 19 with no college [experience] averaged an unemployment rate of 14.5% over the past 12 months. That is up from 13.3% over the prior 12-month period.”

Manufacturing’s offer: With 381,000 job openings today, and as many as 3.8 million new employees needed by 2033, the manufacturing industry has many opportunities both for new college graduates and those without a college degree.

• The Manufacturing Institute, the NAM’s 501(c)3 workforce development and education affiliate, is creating solutions for employers seeking workers with much-needed skills and offers programs and resources for students, veterans and other job seekers looking to enter the industry. Learn more here.

Washington, D.C. – The Senate Finance Committee today unveiled its version of the One Big Beautiful Bill Act—preserving the core of the 2017 Tax Cuts and Jobs Act.

National Association of Manufacturers President and CEO Jay Timmons issued the following statement:

“Chairman Crapo and the Senate Finance Committee are delivering the kind of tax policy manufacturers have been calling for—policy that drives growth, unlocks investment and grows jobs. We commend Chairman Crapo for his leadership and steadfast commitment to pro-manufacturing tax policy. By preserving the full suite of pro-growth policies from the TCJA, this bill marks a major step forward for manufacturing in America.

“Manufacturers also want to ensure that the tax code continues to support inbound investment into the United States as well as preserve incentives that drive investments in the manufacturing and energy production needed to power America’s economic growth. If the Senate acts now, manufacturers can continue to grow—buying equipment, hiring workers, increasing pay and expanding operations with greater certainty and confidence.

“The Finance Committee recognizes what’s at stake: nearly 6 million jobs and more than a trillion dollars in economic output depend on getting this right.

“This is a once-in-a-generation opportunity to lock in a manufacturing resurgence in the U.S. Let’s finish the job—because when manufacturing wins, America wins.”

Background:

The Senate bill contains key NAM priorities, including:

• A permanent pass-through deduction and retention of pro-growth individual and corporate tax rates;
• Permanence for pro-growth tax policies like immediate R&D expensing, full expensing for capital equipment purchases and a pro-growth interest deductibility standard;
• An expanded and permanent estate tax exemption;
• Pro-manufacturing reforms to the international tax system that protect America’s competitiveness on the world stage; and
• A first-of-its-kind incentive allowing immediate expensing of the cost of new factories and modernizations.

Last week, the NAM released a report, “Keeping Our Promises: Manufacturers on Eight Years of Tax Reform,” featuring firsthand success stories from manufacturers on how the TCJA enabled them to invest in their facilities, their workers and their communities. Learn more about the NAM’s Manufacturing Wins campaign to protect 2017 tax reform here.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.93 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

The NFIB Small Business Optimism Index rose three points in May to 98.8, remaining above the 51-year average of 98. May’s increase stemmed from a rise in expected business conditions and sales expectations. Of the 10 components included in the index, seven increased, two decreased and one stayed the same. Meanwhile, the Uncertainty Index climbed two points to 94 and remains far above the 51-year average (68) and the average since 2016 (80).

Taxes were ranked as small businesses’ top concern, with 18% reporting them as their most important problem, up two points from April. Labor quality ranked second as the top concern for many small business owners in May, with 16% reporting it as the most important problem. In May, 34% of small business owners reported jobs they could not fill, the same as April. The last time job openings were below 34% was January 2021. The challenge of filling open positions remains acute, particularly in manufacturing, transportation and construction. Inflation now ranks third with 14% reporting it as a top concern, and the last time it was below 14% was in September 2021.

A net 26% of small business owners reported raising compensation, down seven percentage points from April and the lowest reading since February 2021. Profitability remained under pressure, with a net negative 26% reporting positive profit trends, which is five points worse than in April. Of those reporting lower profits, 36% claimed weaker sales, while 13% cited increased material costs. A net 31% of small business owners planned price hikes in May, up three percentage points from April. Despite the economy showing signs of slowing, demand remains too strong to trigger widespread price reductions. Meanwhile, 4% reported their last loan was harder to get than previous attempts, down one point from April, but a net 7% of owners reported paying a higher rate on their most recent loan, up one point from the prior month.

The outlook for general business conditions rose 10 points to 25%. In spite of the increase in outlook, the share of firms saying it is a good time to expand was low, when looking at the history of the survey, despite rising one point to 10% in May. Businesses are still stumbling through mounting uncertainties, including the rocky tariff outlook and the future of tax policy, as they wait for Congress to renew tax reform.