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Manufacturers support the policy recommendations laid out in the House of Representatives’ newly released report on artificial intelligence, the NAM said Tuesday.

What’s going on: The Bipartisan House Task Force Report on Artificial Intelligence contains AI-related recommendations for implementation by Congress.

• Drafted by the House AI Task Force—12 Republicans and 12 Democrats—the 273-page document “highlights America’s leadership in its approach to responsible AI innovation while considering guardrails that may be appropriate to safeguard the nation against current and emerging threats,” the task force’s co-chairs, Reps. Jay Obernolte (R-CA) and Ted Lieu (D-CA), wrote in a letter to House Speaker Mike Johnson (R-LA) and House Minority Leader Hakeem Jeffries (D-NY) at the beginning of the report.

The details: The task force report includes many recommendations that the NAM supports, including the following:

• Promote innovation: “As the global leader in AI development and deployment, the United States is best positioned to responsibly enable the potential of this transformative technology for all. To maintain this leadership and enable the U.S. economy to harness the full benefits of AI, policymakers should continue to promote AI innovation.”
• Safeguard against harm: “A thoughtful, risk-based approach to AI governance can promote innovation rather than stifle it.”
• Plan for power needs: “Planning properly now for new power generation and transmission is critical for AI innovation and adoption.”
• Develop an AI-ready workforce: “Successful collaborations between educational institutions, government and industries should effectively align education and workforce development with market needs and emerging technologies.”
• Protect privacy: Congress should “[e]nsure privacy laws are generally applicable and technology-neutral.”
• Make compliance feasible: Lawmakers should ensure that AI regulatory compliance is not unduly burdensome for small businesses
• Increase cooperation: Bolster collaboration between the government, industry and academia to boost innovation and expand markets.

NAM alignment: In May, the NAM released “Working Smarter: How Manufacturers Are Using Artificial Intelligence,” its own report on AI’s deployment in the manufacturing sector and an accompanying list of suggested policy actions for Congress to take.

• The NAM briefed legislators on its report in September.

Next steps: The NAM will work closely with policymakers in Congress and the incoming administration to bolster AI innovation in manufacturing, based on shared policy goals.   

Additionally, manufacturers will continue to call on Congress to pass federal data privacy legislation that “preempt[s] state privacy regulations [and] resolve[s] conflicting requirements in different states”—an important issue for the use of AI where the House report does not prescribe a policy solution.

The NAM is urging President Trump to reconsider the Biden administration’s misguided findings regarding new liquefied natural gas export permits, following the release of a Department of Energy study claiming that increased permit numbers would have negative effects on the nation.
 
What’s going on: The Department of Energy’s analysis, released Tuesday, holds “that ‘unfettered’ shipments of the fuel would make domestic prices rise … [and would] displace more renewables” (E&E News).

• However, the “report from Energy Secretary Jennifer Granholm is clearly a politically motivated document designed for an audience who believes no form of carbon-based energy is acceptable,” NAM President and CEO Jay Timmons said. “LNG exports play a crucial role in reducing emissions by providing cleaner energy alternatives to countries reliant on higher emission sources.”   

What the ban’s done: The result of the Biden administration’s moratorium—issued in January—on the issuance of new U.S. LNG export permits has been “chilled energy investment, costing the country manufacturing jobs and holding us back from achieving energy dominance on the world stage,” Timmons continued.

• “The DOE’s report claims to be concerned about security, but the actions of this administration on LNG only serve to incentivize Europe to purchase natural gas from Russia.”  

A popular, key energy source: U.S. LNG is far cleaner than Russian LNG (House Energy and Commerce Committee). Furthermore, an October study by the NAM and PwC found that U.S. LNG is a significant and crucial contributor to gross domestic product, as well as an important source of jobs and federal, state and local taxes.

• What’s more, Americans want to keep exporting it. In a March NAM poll of 1,000 registered voters, more than 87% said they believe the U.S. should continue to export LNG.   

The bottom line: “The data is clear: LNG exports are a driving force for economic growth and job creation in the United States,” Timmons concluded. “Halting LNG export licenses as suggested would threaten nearly a million jobs and undermine our nation’s economic stability. The NAM asks President Trump to end this political war on the energy manufacturers that power our economy, fuel job growth and help ensure America’s national security.” 

In its current form, the Environmental Protection Agency’s recent proposal to add specific per- and polyfluoroalkyl substances and PFAS categories to a database of toxic chemicals would place an unnecessary hardship on manufacturers, the NAM told the agency recently.
 
What’s going on: In October, the EPA published draft rules that would add 16 individual PFAS and 15 PFAS categories representing more than 100 individual PFAS to its Toxic Release Inventory, a list of potentially hazardous chemical release and waste management activities taking place in the U.S.

• Companies producing or manufacturing products with chemistries added to the TRI are required to complete and submit inventory forms each year for the chemicals they make and use over established limits.
• “The NAM believes this proposed rule will create unduly burdensome compliance requirements and increase costs for manufacturers and consumers as written,” NAM Vice President of Domestic Policy Chris Phalen said this month.

What should happen: The EPA should “adopt the following approaches to the proposed rulemaking”:

• Stay the proposal to give the public more time to comment on it.
• Revise the proposed PFAS and PFAS category additions to reflect “a meaningful baseline of scientific evidence” and ensure that “the scientific evidence justifying the listing[s] [is] supported by peer review and public comment.”
• List individually every PFAS added to the TRI and make each one identifiable.
• Narrow the group of PFAS listed as “chemicals of special concern” to reflect the scope of authority granted to the EPA by the fiscal year 2020 National Defense Authorization Act.

Why it’s important: “While the EPA estimates this proposed rule would result in up to 1,110 TRI reporting forms annually at an estimated cost of up to $6.6 million for its first year and up to $3.1 million for subsequent years, we anticipate the compliance costs to manufacturers will be significantly higher,” Phalen continued.

• If finalized as written, the rule will force manufacturers to hire additional workers and consultants, train employees on proper reporting processes, spend huge sums of money on testing and verifying results and much more.
• The result: “a costly drain on [manufacturers’] resources … [that] will lead to a rise in operational and production costs far above the EPA’s cost estimates for the proposed rule.”

U.S. import prices advanced 0.1% in November, the same as the previous month and led by higher fuel prices. Over the past year, import prices rose 1.3%, the largest year-over-year increase since July 2024. U.S. export prices were unchanged, following a 1.0% increase in October. Higher nonagricultural prices offset lower agricultural prices. Over the past year, export prices rose 0.8%.

Fuel import prices increased 1.0% in November, after declining 0.8% in October. These increases are attributed to higher prices for natural gas and petroleum in November. Nevertheless, prices for import fuel declined 8.6% over the past year. Import prices for petroleum increased 0.4% in November, after declining 11.6% from July to October. While import prices for natural gas declined 34.5% over the past year, prices increased 47.4% in November and 32.7% the previous month.

Nonfuel import prices were unchanged in November, following a 0.2% increase the two previous months. Nonfuel import prices have not declined on a monthly basis since May 2024, when they fell just 0.2%. Higher prices for foods, feeds and beverages and consumer goods offset lower prices for nonfuel industrial supplies and materials, capital goods and automotive vehicles in November. The price index for nonfuel imports increased 2.3% over the past year.

Following increases of 1.9% in October and 0.8% in September, agricultural export prices declined 0.4% in November. Over the past 12 months, agricultural export prices dropped 2.5%. On the other hand, nonagricultural export prices increased 0.1% in November, with lower prices for consumer goods offsetting higher prices for capital goods and nonagricultural foods. Prices for nonagricultural industrial supplies and materials and automotive vehicles were unchanged. Over the past year, nonagricultural export prices rose 1.2%, the largest annual increase since July 2024.

The NFIB Small Business Optimism Index rose eight points in November to 101.7, the highest rating since June 2021 and finally rising above the 50-year average of 98 after 34 consecutive months below the average. Of the 10 components included in the index, nine increased and one was unchanged. After October’s record high of 110, the Uncertainty Index declined 12 points to 98, as expected following the election.

Despite increased optimism, inflation is still the top concern for many small business owners, with 20% identifying higher input and labor costs as their primary issue, surpassing the issue of labor quality by one point. In November, 36% of small business owners reported jobs they could not fill, up 1% from October.

A net 28% of small business owners planned price hikes in November, up 2% from the month prior. A net 32% of small business owners reported raising compensation, up one point from October. Continuing the trend from October, a net 5% of owners reported paying a higher rate on their most recent loan, the lowest reading since January 2022. Profitability remained under pressure, with a net negative 26%, but was the highest (least negative) reading this year. Of those reporting lower profits, 32% claimed weaker sales.

The outlook for general business conditions had a positive reading for the first time since November 2020, jumping an incredible 41 points. While small business owners are still facing unprecedented economic adversity, owners remain hopeful for an improved political climate and as they head into the holiday season.

The Producer Price Index for final demand (also known as wholesale prices) increased 0.4% in November, after rising 0.3% in October. Over the past year, the final demand index rose 3.0% on an unadjusted basis, which is the largest increase since the year-over-year increase in February 2023 of 4.7%. Prices for final demand excluding foods, energy and trade services inched up 0.1%, after rising 0.3% in October.

In November, prices for final demand services increased 0.2%, the fourth consecutive increase, while prices for final demand goods rose just 0.7%. Much of the increase in the index can be attributed to prices for final demand of foods, which increased 3.1%. The index for final demand goods, excluding foods and energy, increased just 0.2%. More than one-third of the increase in prices for final demand services is due to margins for machinery and vehicle wholesaling, increasing 1.8%.

Processed goods for intermediate demand were unchanged. On the other hand, over the 12 months ending in November, prices for processed goods for intermediate demand fell 0.5%. Within processed goods for intermediate demand, the index for particleboard and fiberboard jumped 11.4%. Overall, in November, a 0.1% increase in prices for processed materials less foods and energy and a 0.9% increase in processed foods and feeds offset a 1.2% decrease in prices for processed energy goods.

Meanwhile, prices for unprocessed goods for intermediate demand moved up 0.6% in November, after increasing 2.4% in October. The increase was driven by a 2.9% rise in unprocessed foodstuffs and feedstuffs. Meanwhile, nonfood materials less energy prices edged up just 0.4%, and unprocessed energy materials decreased 2.0%. Over the 12 months ending in November, prices for unprocessed goods for intermediate demand fell 1.9%.

Consumer prices increased 0.3% over the month and 2.7% over the year in November, rising from the 2.6% over-the-year increase in October. Core CPI, which excludes more volatile energy and food prices, stayed the same at a 3.3% over-the-year increase and rose 0.3% over the month, which has been the monthly increase for four consecutive months.

Shelter increased 0.3% over the month and 4.7% over the year in November, the smallest 12-month increase since February 2022 but still accounted for nearly 40% of the monthly increase of the all-items index. On the other hand, food price increases have picked back up, rising 0.4% over the month and 2.4% over the year in November. Prices for transportation services leveled out over the month, not rising at all, but are still up 7.1% over the year, with motor vehicle insurance increasing 12.7% over the year.

Energy costs increased 0.2% in November but fell 3.2% over the year. While energy commodity prices are down 8.5% over the year, electricity prices are up 3.1%.

Although the over-the-year headline rate ticked up from the previous month, markets are still anticipating a 25-basis-point rate cut at the Federal Open Market Committee’s meeting this week. However, slowing progress on inflation might upend the Federal Reserve’s previous easing plans for 2025, pointing to the possibility of the FOMC’s interest rate target being cut at a slower pace, but the market still anticipates rate cuts in 2025.

At Milo’s Tea, every element of the company’s delicious beverages is scrutinized for sustainability opportunities—from bottle-sourcing to the water and tea leaves that go into each gallon.

The bottles: The Bessemer, Alabama–based business recently opened a new, one-gallon bottle-blowing facility in its hometown, right next to its distribution center.

• The new facility will reduce carbon dioxide emissions by 1,000 metric tons per year, since it will eliminate the need for trucks to travel from farther-off bottling locations to the Bessemer distribution facility.

• “We’re still family-held, and sustainability is a family value, too,” said Chief Operating Officer Chris Droney. “When you have a project like this, that has a positive environmental impact and allows us to reinvest in our company growth, that’s a win–win.”

The water: The 78-year-old Milo’s Tea—which in 2022 became the top-selling refrigerated tea brand in the U.S. and is the fastest-growing refrigerated lemonade brand—has a strong track record of environmental resource preservation, starting with its water conservation.

• Since 2019, Milo’s has conserved nearly 37 million gallons of water, an achievement that has helped earn the certified woman-owned business two Platinum TRUE Zero Waste certifications (one for its Bessemer plant and another for its Tulsa, Oklahoma, facility).
• Among other measures, the company has invested in new, more water-efficient line-cleaning (clean-in-place) technology, which it uses between production runs to clean the brew, blend and filler equipment. “If we’re going from making sweet tea to zero-calorie tea, for example, it’s very important to make sure there’s no residue” in the lines, Droney explained.
• The enhanced equipment reduces energy, water and cleaning agent consumption, while also improving the effectiveness of the cleaning cycle. Milo’s made additional improvements to the production scheduling process, which decreased the total number of cleaning cycles required and further reduced energy, water and cleaning agent consumption.
• Milo’s was also able to reduce the amount of excess product the company had in its tanks during those flavor switchovers, further reducing waste and water use.

The tea: Milo’s earned its Oklahoma Zero Waste certification in part through “re-earthing” its tea leaves—“the largest waste stream we have”—in partnership with GEM Dirt, Droney said.

• The topsoil company takes Milo’s spent tea leaves and turns them into compost that it blends with dirt to create nutrient-rich soils. In 2023, Milo’s re-earthed more than 10,000 tons of used tea leaves from all facilities.

The packaging: When it comes to packaging, Milo’s doesn’t let dents stand in its way. The firm has installed compressed air stations on its lines to un-dent damaged bottles before they’re filled, so that none are thrown away.

• “At our flagship facility in Bessemer, if bottles can’t be undented, we send them back to the manufacturer and they can be reground and made into new bottles,” Droney continued. “A recycled bottle uses less resin than a new one.”

The production process: Milo’s has also recycled and diverted more than 148,000 tons of waste since 2019, another reason it has been so highly certified. On top of that, it has prioritized renewable energy sources at its facilities.

• Solar panels went live at the Bessemer plant in 2023, and this past summer, the business commissioned a rooftop solar farm at its Tulsa facility.
• The panels offset from 5% to 10% of each site’s total annual energy consumption, Droney told us. More solar panels are scheduled for other Milo’s sites, he added.

Advice for other manufacturers: Careful environmental stewardship can pay dividends for manufacturers, according to Droney.

• Profitability and sustainability “go hand in hand; we really believe that,” he said. “Solar power, onsite bottle blowing—there’s a cost to it, but there’s also a benefit. When you combine those, not only are you doing the right thing, but you’re generating fuel for future growth. We all have a responsibility to drive sustainability.”

New orders for manufactured goods rose 0.2% in October, after falling the previous two months. When excluding transportation, new orders edged up 0.1%. Orders for durable goods rose 0.3% after falling 0.4% in September. Year to date, durable goods orders are down 0.8%. Nondurable goods ticked up 0.1% in October after declining 0.1% in September. Nonetheless, nondurable goods orders are up 1.5% year to date.

New orders for mining, oil field and gas field machinery experienced the greatest increase of any industry at 17.4%, while metalworking machinery had the largest over-the-month decrease of 5.9%. After falling 23.0% in September, defense aircraft and parts orders are rose 16.6% in October. The largest over-the-year changes occurred in nondefense aircraft and parts (down 30.2%) and computers (up 21.5%).

Factory shipments decreased 0.2% in October, after falling 0.4% in September. Shipments excluding transportation edged up 0.1%, the same increase as the previous month. Shipments for durable goods declined 0.5% in October but are up 1.8% year to date. Meanwhile, nondurable goods shipments inched up 0.1% in October and are up 1.5% year to date.

Unfilled orders for all manufacturing and durable goods industries rose 0.4% in October, following a 0.3% increase in September. The unfilled orders-to-shipments ratio for durable goods increased to 7.03 from 6.97 in September. Inventories saw a slight decrease of 0.1%, while the inventories-to-shipments ratio remained unchanged at 1.46.

In November, U.S. manufacturing remained in contraction but at the slowest pace of the past five months. The S&P Global U.S. Manufacturing PMI rose to 49.7 in November from 48.5 in October, barely below the 50 threshold that indicates a contraction in the sector. This suggests manufacturing conditions continued to deteriorate but to a lesser extent than the previous month.

While the rate of decline in new orders slowed sharply, output continued to be scaled back. In addition, production levels fell for a fourth consecutive month to the fastest rate in more than a year. However, rising confidence encouraged manufacturers to increase employment. The rise in employment despite a slowdown in new orders meant firms were able to reduce their backlogs of work.

New export orders also declined and at the fastest pace since June 2023, as international demand weakness worsened. Nevertheless, the downturn in domestic demand for goods is easing, which could improve conditions for manufacturers in 2025. Respondents’ optimism about the year ahead strengthened to the highest level in two and a half years, boosted by the pre-election uncertainty ending.

The pace of input cost inflation eased slightly. On the other hand, output prices increased at a slightly faster pace and was above the pre-pandemic average. As a result of tariff threats, one in four companies reported higher input purchases in November, underlying manufacturers’ concern for how tariffs may impact input prices.