Report: Broken Permitting System Costs Manufacturing $8B Annually

The country’s broken permitting system costs manufacturers $7.9 billion annually, according to a new report released by the National Association of Manufacturers and the Foundation for American Innovation.

Released March 19, the America on Hold: How Permitting Delays Stall Manufacturing Progress report underscores the urgent need for bipartisan, comprehensive permitting reform to strengthen economic and national security.

The findings highlight how widespread and complex federal permitting requirements have become, with manufacturers most commonly citing Clean Water Act permits and Clean Air Act permits.

Clean Air Act permits—required for 72.6% of projects—were cited as the most burdensome approval process.

The report draws from a recent survey of manufacturers examining the types of projects companies are pursuing, the permits they most frequently require, where uncertainty and regulatory complexity create challenges, and which reforms will have the greatest impact.

The findings reveal a permitting system that hits manufacturers hardest where they operate most often: routine upgrades, expansions, and ongoing operations.

‘Roadblocks’

The report documents what manufacturers are experiencing: specific statutes creating bottlenecks and the reforms that will unleash manufacturing investment, get shovels in the ground, and allow them to compete on the world stage.

“Manufacturers are investing across America, but permitting roadblocks are holding projects back,” said NAM president and CEO Jay Timmons.

“It takes the U.S. up to 80% longer than our peer nations to move projects forward.

“Manufacturers want ribbon cuttings, not red tape—that means modernizing our laws to streamline regulations and eliminate duplicative reviews and a regulatory regime to support timely permitting and give manufacturers the certainty to invest, build, and create jobs.”

The survey found that:

• 50.8% of manufacturers say permitting concerns discourage investment in new or expanded capacity
• 65.6% would increase U.S. investment if permitting timelines were shorter and more predictable.
• The most common permitted activities are facility expansions and equipment upgrades, not megaprojects

Permitting Burden

Until now, consolidated research demonstrating the full economic impact of the federal permitting system on manufacturing investment has been limited—largely due to the sheer number of laws and regulations governing permits.

The NAM–FAI report addresses that gap by combining publicly available permitting data with original industry survey results to provide one of the most comprehensive views to date on the cost of permitting for manufacturers.

Using external and survey data, the NAM–FAI findings estimate that over the past decade, the U.S. manufacturing sector incurred an average annual permitting burden of over $7.9 billion.

Unit costs were derived by multiplying the 10-year federal permit counts with the total out-of-pocket and indirect costs of the permitting process:

• The federal count of applications and final permits obtained by manufacturers over the past 10 years, categorized by permit type (i.e., NEPA, Clean Water Act, Clean Air Act, etc.)
• Out-of-pocket costs that include application fees, consultants, legal expenses and more from project delays
• Delays created by indirect costs, such as carrying costs, lost revenue from pushing back project initiation, inventory and contract impacts

Priorities

The report features eight recommendations for Congress and the administration:

1. Make routine changes routine again: Minor upgrades should face proportional review—not novel-project scrutiny.
2. Make renewals boring. Unchanged operations should trigger verification, not full re-permitting.
3. Make timelines predictable. Statutory deadlines once an application is complete—no open-ended queues.
4. Reform NEPA. Expand categorical exclusions, narrow scope, expedite judicial review.
5. Modernize the Clean Air Act. Workable PM2.5/ozone standards, realistic review cycles, regional credit trading.
6. Streamline the Clean Water Act. Clarify §401/§404 timelines, scope, and expand use of general permits.
7. Raise the bar for injunctions. Procedural litigation should only halt operations when irreparable harm is imminent.
8. Create durable permit certainty. Legally permitted projects must stay permitted. Limit revocation risk.