Federal Regs Harming Manufacturing

10.01.2012

Small Business

Report says EPA imposes heaviest burden

A new report from NERA Economic Consulting on behalf of the Manufacturers Alliance for Productivity and Innovation (MAPI) finds that U.S. manufacturers are significantly impacted by the escalating volume and cost of compliance with federal regulations.

The study, Macroeconomic Impacts of Federal Regulation of the Manufacturing Sector, produced a number of key findings:

Since 1998, growth in the cost of major regulations has far exceeded manufacturing sector growth and overall economic growth. In that span, the cumulative inflation-adjusted cost of compliance for major manufacturing-related regulations grew by an annualized rate of 7.6%. Over this same period, annual growth in the physical volume of manufacturing sector output averaged a mere 0.4%, while U.S. inflation-adjusted GDP growth averaged 2.2% per year.
U.S. manufacturers are subject to an estimated 2,183 unique federal regulations.
In 2012, major regulations could reduce the total value of shipments from the manufacturing sector by up to $500 billion in constant 2010 dollars.
By count, the Environmental Protection Agency imposes the largest regulatory burden on manufacturers (972 regulations in total, 122 major regulations), followed by the departments of Transportation (880/69), Labor (214/27), and Energy (106/17).
By cost, EPA also imposes the largest regulatory burden on the manufacturing sector ($117 billion in constant 2010 dollars), followed by the departments of Transportation ($25 billion), Health and Human Services ($10 billion), and Homeland Security ($7 billion).

“We understand the important role regulation can play in promoting health and safety, but there also needs to be a more rational approach to our regulatory system,” says Stephen Gold, MAPI president and CEO. “If policymakers want American manufacturers to be more competitive and to invest more in this country, they need to ensure that federal regulations are better coordinated and streamlined to minimize costs.”

Read the entire report.