The NAM’s newly released Q3 Manufacturers’ Outlook Survey shows that manufacturers are struggling with inflation, supply chain issues and workforce challenges. Though three-quarters of respondents expressed optimism about the economy, that figure represents a decline.
A mixed view: Nearly 80% of manufacturing leaders who were surveyed said that supply chain disruptions were one of the most important challenges facing their business.
- Manufacturers were also pessimistic about that reality turning around anytime soon, with less than 11% of respondents saying that they expected improvement by the end of the year.
Other challenges: The supply chain wasn’t the only source of concern.
- Attracting and retaining a quality workforce (76.1%), increased raw material costs (76.1%) and transportation and logistics costs (65.9%) were also cited as some of the biggest challenges facing the industry.
- More than 40% said that inflationary pressures were worse today than six months ago.
- In addition, 53.7% noted that higher prices were making it harder to compete and remain profitable.
The details: Among the cited sources of inflation were:
- Increased raw material prices (95.2%);
- Freight and transportation costs (85.4%);
- Wages and salaries (81.7%);
- Energy costs (54.4%);
- Health care and other benefits costs (49.0%); and
- The war in Ukraine and global instability (about 21%).
A bright spot: On the plus side, nearly 70% of respondents said that strengthening U.S. leadership in energy innovation and competitiveness was the most important part of the CHIPS and Science Act—a bill that the NAM worked aggressively and successfully to pass through Congress.
Timmons says: NAM President and CEO Jay Timmons said, “The majority of respondents are expecting a recession this year or next, and it’s clear the challenging environment is taking its toll.”
- Timmons discussed the survey on CNBC yesterday.
Learn more: Join NAM Chief Economist Chad Moutray for a webinar update this Thursday, Sept. 22, from 2 p.m.—3 p.m. ET on the manufacturing sector. The webinar will include an in-depth look at these survey results. Register here.