For America's manufacturers, the glass is nearly full.
The National Association of Manufacturers latest Manufacturers' Outlook Survey shows that 95% of manufacturers are positive about their company's outlook over the next 12 months—an all-time high.
The association attributes this optimism to federal pro-growth policies, including tax reform.
More than 550 small, medium, and large manufacturers responded to the survey, and nearly all were positive about the coming year.
Of the small manufacturers who responded, 90% expressed optimism for the next 12 months. That number grew to 96% for medium-size manufacturers, and an astounding 98% for large manufacturers.
"This record optimism is no accident," said NAM president and CEO Jay Timmons.
"It is fueled by the game-changing tax reform passed six months ago."
Federal Tax Reform
Timmons said manufacturers promised last year that if federal tax reform became law, they would deliver for their people and communities.
"Now manufacturers are keeping our promise: hiring new workers, raising wages, improving benefits, buying equipment, and expanding right here in the United States," Timmons said.
"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 survey was conducted May 22 through June 5 and queried 568 companies. Of them, 309 were medium-size, 145 large, and 114 small manufacturers.
The 95% positive outlook response is the highest since the survey was introduced in the fourth quarter of 1997.
CBIA is well aware of this manufacturing growth.
It's one reason the organization recently joined forces with CONNSTEP—to strengthen manufacturing in Connecticut.
With manufacturers' record-setting confidence and plans to keep hiring and growing, more good news is yet to come.
While the state's economy contracted last year—shrinking for the fourth time in five years—durable goods manufacturing led all industries with 0.39% growth.
Manufacturing Activity Soars
The NAM report also found that:
- Respondents expect sales to grow almost 6% in the next 12 months
- They expect full-time employment to grow 3%
- Capital investments to grow 4%
- Prices will increase 3%
- Inventories to increase 1.5%
- Production to grow by 6%’
- Wages to increase by 3%
- Exports to grow by 1.5%
All those responses represented all-time highs in the survey's 21-year history.
Still, manufacturers have concerns, including hiring and retaining a talented workforce, the rising cost of raw materials, and increasing healthcare costs.
But, overall, optimism ruled in the survey.
Not only is this optimism fueled by the tax cuts, it also stems from "other positive policy changes out of Washington like its less burdensome approach toward regulatory policy—pro-growth stances that will help manufacturers compete in the global marketplace," the report said.
As recently as two years ago, survey respondents cited an unfavorable business climate as one of the biggest impediments to growth. In fact, 75% of respondents cited that as recently as the second quarter of 2016.
But the latest survey shows just 19% of respondents citing tax and regulatory climate as being a top concern.
Nearly all respondents—94%—see wages increasing over the next year, while almost half—47%—expect them to grow 3% or more.
Now, the biggest concerns for manufacturers are attracting and retaining a quality workforce, followed by the rising cost of raw materials.
For the third straight year, manufacturers cited the inability to attract and retain a quality workforce as their top business challenge, with 77% saying it's a major concern, especially with robust job growth and an encouraging economic outlook.
Nearly two out of three (65%) said the rising cost of raw materials is their second top concern while a similar percentage cited rising healthcare costs as a third major concern.
Manufacturers continue to be upbeat about regulatory reform and its economic impact, with roughly half saying they were more likely to increase capital spending, hiring, wages, and benefits due to the changed regulatory environment in Washington.
And two-thirds of respondents said they intend to increase apprenticeships and training in the next 12 months.