The numbers might still not be all that pretty, but they do look a little better.
The National Association of Manufacturers released its quarterly Manufacturers’ Outlook Survey on Thursday, with 61.7% of manufacturers saying they had a positive outlook for their company, up from 56.6% in March and 59.6% in December. (For comparison, it was still at 91.2% and 88.5% in December 2014 and March 2015, respectively, before plummeting last year.)
A pair of government-related numbers in the report reflect manufacturers’ seemingly overwhelming frustration with regulations and finances: a whopping 82.6% of respondents said their company’s total spending on state and federal regulatory compliance had increase over the last few years — with capital investments and expenditures the most likely use of funds if those compliance costs dropped — while 74.3% favored lowering the corporate tax rate to 25%. (A total of 322 manufacturers across the country responded to the survey throughout the second half of May.)
“While this survey offers a bit of optimism for manufacturers, there is still a dramatic need for improvement before our sector can regain its footing,” NAM chief economist Chad Moutray said. “This survey, coupled with the latest jobs report, should serve as a stark reminder to Congress that policy priorities, including market-opening trade agreements and comprehensive tax reform, as well as addressing regulatory barriers, are top of manufacturers’ minds.”
Other facts and figures from the survey:
- The NAM Manufacturing Outlook is in line with overall sentiment, up to 42.2, from 38.7 in March. Medium-sized manufacturing companies, defined between 50 and 499 employees, remain more optimistic than smaller companies of less than 50 employees.
- Research and development are always a big deal. More than three-fifths of respondests said they favored making an enhanced research and development incentive permanent, with 55.0% expressing a desire for robust capital cost-recovered provisions as a chief component of comprehensive tax reform.
- Health insurance costs are still a big challenge, with 74.5% of all respondents citing that as a challenge. Moreover, manufacturers expect those costs to increase 8.3% over the next year.
- Among the couple of dozen manufacturers’ comments included in the report, several cited the slowdown in China as a major challenge … several cited “federal-mandated wage increases” … a couple mentioned losing knowledge with the continued retirements of the current aging workforce … and imports, as always, and unfavorable trade policies were a key thord.
“If lawmakers in Washington take action on these and other items,” Moutray said, “they could help reverse the pain manufacturers are experiencing, expanding job opportunities and strengthening the broader economy as a result.”