The economy continues to limp along for manufacturers, reflected in statistical form in the new quarterly report from the National Association for Manufacturers.
The group’s fourth-quarter Manufacturers’ Outlook Survey highlighted a five-point drop in the NAM Outlook Index, and included survey results from manufacturers that revealed the rough business climate remains the top challenge and that more than half of all manufacturers surveyed believe the U.S. Federal Reserve should not raise interest rates until at least next year.
“Manufacturers have wrestled with economic headwinds for much of the year,” NAM chief economist Chad Moutray said. “The stronger dollar, economic weaknesses in key export markets and reduced commodity prices have all played a role in holding manufacturing back year-to-date. Anxieties about the business climate contributed to manufacturers’ willingness to add new workers or make capital investments.
“This apprehension is reflected in the latest jobs numbers, which showed manufacturing employment continued to fall. The diminished outlook in the sector continues to illustrate the need for pro-growth policies, particularly those that help to make firms more globally competitive. These include tax policies that encourage more investment while also leveling the playing field with international peers.”
The aforementioned Outlook Index, which measures sentiment about the industry, checked in at 40.5, down from 51.8 just six months ago, with 50 serving as the baseline. Just 59.6% of respondents remain positive in their company’s outlook, down from 91.2% this time last year.
Other findings from the report include close to 58% of those surveyed responding that recent global slowdown has hurt their company’s international sales or exports, and that anticipated industry growth for 2016 remains modest at best.
A separate NAM study also released Tuesday, Heads Up: A Tax on Employee Benefits Is Coming Your Way, looks at the economic impact of the Affordable Care Act under several scenarios and finds that while the tax is intended to target high-end insurance plans, it will hit the middle class as well as employers across the board.
“Manufacturers have always provided generous health care benefits to their employees — in fact, at least 97% were doing so before enactment of the ACA,” NAM president and CEO Jay Timmons said. “However, this tax is just one more example of how Washington has failed workers. It will significantly add to the cost of manufacturing in America, making it far more difficult for manufacturers to continue to provide benefits when they must compete with manufacturers overseas. Health care costs and regulations are already a top concern for manufacturers; this tax makes the situation worse. This study shows just how many middle-class families and manufacturers are going to be hurt by this tax, and it is time for our lawmakers to repeal it.”