U.S. Manufacturers Want Elected Leaders To Focus On Growth

Date: January 13, 2023

U.S. Manufacturers Want Elected Leaders To Focus On Growth
Randy Wolken, President & CEO

The National Association of Manufacturers (NAM) recently published their Fourth Quarter 2022 Manufacturers’ Outlook Survey showing that manufacturers are concerned about a challenging economic environment characterized by inflation, supply chain disruptions, and a workforce crisis. The survey was conducted between November 29 and December 13, 2022. Our members at MACNY share similar concerns for the coming year. We will watch closely for initiatives from Albany and Washington that grow our economy, especially the high-tech and manufacturing sectors.

Key Findings from NAM’s Survey include:

  • 62.4% of manufacturing leaders believed that the U.S. economy would officially slip into a recession in 2023.
  • More than three-quarters of respondents (75.8%) said pushing back against regulatory overreach should be the top priority of the 118th Congress. Other priorities included supporting increased domestic energy production (69.3%), passing comprehensive immigration reform (65.4%), maintaining and permanently extending tax reform (63.0%), controlling rising health care costs (55.5%), addressing the skills gap facing manufacturers (50.5%), and modernizing permitting to reduce red tape (40.0%).
  • 75.7% of manufacturing leaders listed attracting and retaining a quality workforce as a primary business challenge, with supply chain disruptions (65.7%) and increased raw material costs (60.7%) as the next biggest impediments.
  • Even in a recession, manufacturers plan to do the following: capital spending on new equipment and technological investments (65.3%), upskilling and training of existing workforce (64.1%), seeing solid demand for their company’s products (63.2%), hiring new employees (55.1%), investing in research and development (52.1%), and spending on new structures and existing facilities (38.6%).
  • 68.9% of respondents have a positive outlook for their company. Although still significant, this is the lowest response since the third quarter of 2020.

The Securities and Exchange Commission’s focus on Environmental, Social, and Governance (ESG) disclosures is an area of growing concern among companies. Over three-quarters of publicly traded companies, 77.3% of respondents, were concerned that the Securities and Exchange Commission’s focus on ESG disclosures would increase reporting costs and divert funds from productive uses. Other impacts cited included empowering and encouraging shareholder activists (53.0%), exposing companies to increased legal liability (53.0%), undermining materiality and confusing investors (53.0%), discouraging companies from setting ambitious climate or other ESG goals (33.3%), exposing competitively sensitive information (30.3%), and harming small businesses, including privately held businesses (28.8%). In addition, 77.6% of publicly traded manufacturers were either somewhat or very concerned that the recent increase in outside pressure on environmental, social, and political topics from activist investors, institutional investors, proxy advisory firms, and other third parties would increase costs for public companies, divert management and board time and resources, and endanger long-term value creation.

Although there are encouraging signs from the latest survey of manufacturers by NAM, there are plenty of areas of concern that our officials in Washington and Albany need to address. We look forward to working with our elected officials to help manufacturers grow despite the challenges over the coming year.