Manufacturers across the country are concerned about an uncertain economic future, according to the NAM’s most recent Manufacturers’ Outlook Survey, conducted in the fourth quarter of 2022.
- More than 62% of manufacturing leaders believe the U.S. economy will officially enter a recession in 2023, according to survey findings.
Big challenges: The survey lays out some of the manufacturing industry’s most significant concerns for the coming year.
- The biggest issue was workforce development and retention, with 75.7% of respondents saying that attracting and retaining a quality workforce was a primary business challenge.
- Supply chain challenges were listed by 65.7% of respondents, while increased raw material costs were called out by 60.7%.
Big plans: Even with these looming threats, the survey suggests that manufacturers have an active year ahead of them.
- According to the survey, 65.3% anticipate capital spending on new equipment and technological investments; 64.1% expect to invest in upskilling and training of their existing workforce; 63.2% see solid demand for their company’s products; 55.1% will hire new employees; 52.1% will invest in research and development; and 38.6% will spend on new structures and existing facilities.
The way forward: Manufacturers also laid out what they see as the most pressing issues for the new Congress to address.
- Critical priorities included pushing back against regulatory overreach, supporting increased domestic energy production, passing comprehensive immigration reform, maintaining and permanently extending tax reform, controlling rising health care costs, addressing the skills gap facing manufacturers and modernizing permitting to reduce red tape.
The big picture: As a result of the challenging economic road ahead, manufacturers’ confidence has declined since previous surveys.
- Just 68.9% of respondents reported having a positive outlook for their company—the lowest rating since the third quarter of 2020, in the midst of the COVID-19 pandemic.
What we’re saying: “Congress failed to act on essential tax reforms, which complicates investment, increases inflationary pressures and could stifle economic growth,” said NAM President and CEO Jay Timmons.
- “Much needed permitting reforms and provisions to strengthen our ability to conduct research and development, buy machinery and finance job-creating investments—which we need to promote growth within the sector—were left on the cutting room floor last year. Those reforms, combined with manufacturers’ ongoing efforts to inspire, educate and empower the future workforce, are critical to our competitiveness.”
NAM in the news: The Hill covered the survey’s results.