The National Association of Manufacturers (NAM) said manufacturers’ optimism in the fourth quarter (4Q) of 2017 is the highest in the 20-year history of the Manufacturers’ Outlook Survey. The NAM said the survey has “risen to unprecedented heights” as a result of the progress made by the U.S. House and Senate to pass President Donald Trump’s signature tax reform overhaul.
“Four quarters of record-setting optimism don’t happen by accident,” said NAM President and CEO Jay Timmons. “It is the direct result of manufacturers witnessing a sea change in policymaking in Washington, D.C., empowering them to hire more, invest more and build more—all in America.”
The U.S. Senate earlier in the month passed the Tax Cuts and Jobs Act, the first overhaul to the U.S. tax code in more than 30 years.
Now, 94.6% of respondents say they are positive about their own company’s outlook, this quarter’s optimism level is the highest in the survey’s 20-year history. Optimism has been at historically high levels throughout the year, averaging 91.8% in the four quarters of 2017. That’s up from just 64.3% for the average in 2016.
“These incredible numbers demonstrate the absolute urgency of getting tax reform signed into law because manufacturers are saying loudly and clearly that more jobs, better pay and manufacturing growth are on the horizon,” Mr. Timmons added. “This also serves as a warning to lawmakers: Fail to get this done, and American manufacturing workers will suffer the consequences of inaction.”
The Manufacturers’ Outlook Survey also found that failure to enact tax reform would have serious consequences for manufacturers. Nearly 60% of respondents say they will lose opportunities to grow their businesses and more than 20% say they will be unable to expand their facilities and hire new workers.
An overwhelming two-thirds of manufacturers would consider a vote against tax reform as a vote against their businesses.
More than three-quarters of manufacturers surveyed support the current tax reforms being debated in Congress. Nearly 63% said comprehensive business tax reform would encourage their company to increase capital spending, and more than half (57.9%) said they would expand their businesses and hire more workers (53.8%).
Nearly half (48.8%) would increase employee wages and benefits.
The November jobs report conducted by the U.S. Bureau of Labor Statistics showed manufacturing added a robust 31,000 jobs, including in machinery (+8,000), fabricated metal products (+7,000), computer and electronic products (+4,000), and plastics and rubber products (+4,000).
Since a recent low in November 2016, before President Donald J. Trump was elected on a platform to protect the industry, manufacturing employment has increased by 189,000. The positive employment situation in the government jobs report follows the ADP National Employment Report, which also showed a stronger-than-expected labor market in the private sector.
“The labor market continues to grow at a solid pace,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Notably, manufacturing added the most jobs the industry has seen all year.”
About the Manufacturers’ Outlook Survey
For 20 years, the NAM has surveyed its membership of more than 14,000 large and small manufacturers to gain insight into their economic outlook, hiring and investment decisions and business concerns. The NAM releases these results to the public each quarter.