U.S. Manufacturers Plan to Expand Domestically

June 18, 2008
New survey reports that majority see tax cuts as key factor promoting innovation and R&D

Over the next three years, 44% of North American companies plan to expand production in the U.S., according to a survey released on June 19 by National Association of Manufacturers (NAM), The Manufacturing Institute, the Canadian Manufacturers and Exporters (CME) and Deloitte Touche Tohmatsu.

Furthermore, 57% of say they will become more globally competitive over the next five years across the supply chain from sales, marketing and customer service to engineering and information technology.

"The survey clearly shows concerns that manufacturing companies want government to address," said Emily DeRocco, President, The Manufacturing Institute. "Manufacturers cited controlling labor costs, enacting favorable tax policies and assisting with the severe shortage of skilled manufacturing workers, including engineers, scientists and technicians, as the top three areas that policymakers should address to help improve their global competitiveness."

DeRocco points out that "structural, non-production costs (corporate tax rates, employee benefits, legal costs, natural gas prices and pollution abatement) for U.S. manufacturers have increased to an amount 31.7% higher than the average for our major trading partners, representing a significant and long-term problem for Americas manufacturers and their employees."

Nearly 80% of respondents identified tax cuts for manufacturers as the key factor promoting innovation and research & development (R&D). "Clearly, Congress needs to extend the R&D credit that expired at the end of last year," noted DeRocco.

The survey looked into how North American manufacturers view tree-trade agreements and found that they are positive about their experiences with 49% reporting that NAFTA helped their business to become more competitive, while only 10% say it has hurt their business. The remaining 41% said it did not affect them one way or the other.

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