Employment, Wage Growth Expectations Also Reaching Record Highs
A record 95.1% of manufacturers registered a positive outlook for their company, the highest level ever in the 20-year history of the Manufacturers’ Outlook Survey. Additionally, expected growth for investments, hiring and wages is reaching historic highs since the survey began in the fourth quarter (4Q) of 1997.
“This record optimism is no accident. It is fueled by the game-changing tax reform passed six months ago,” said NAM President and CEO Jay Timmons. “Last year, manufacturers promised that we would deliver for our people and our communities if tax reform became law. Congress and the president delivered, and now manufacturers are keeping our promise: hiring new workers, raising wages, improving benefits, buying equipment and expanding right here in the United States.”
“And the best part is, with manufacturers’ record-setting confidence and plans to keep hiring and growing, more good news is yet to come.”
The details of the data back up the comments citing the Tax Cuts and Jobs Act (TCJA) as the predominant factor motivating the gains.
Since the end of 2016, the Manufacturers’ Outlook Survey averaged 92.6% positive over the past six quarters. This is the seventh straight quarter where the outlook exceeded the survey’s historical average.
Further, the “business environment” is no longer the concern among manufacturers that it once was. Only 19.1% cite the tax and regulatory climate as being a top concern. That’s a big change from as recently as two years ago, when respondents cited an unfavorable business climate as their primary business challenge.
Three-quarters of manufacturers noted it as their top problem in the 2Q of 2016. This quarter’s NAM Manufacturers’ Outlook Survey found that manufacturers cited the skills gap, or the inability to attract and retain a quality workforce as their top concern. The price of raw materials rose to their second top concern.
About the Manufacturers’ Outlook Survey
Conducted by NAM Chief Economist Chad Moutray, the Manufacturers’ Outlook Survey has surveyed the association’s membership of 14,000 large and small manufacturers on a quarterly basis for the past 20 years to gain insight into their economic outlook, hiring and investment decisions and business concerns.