When you speak with manufacturers today about the economy, their outlook is often a complicated mix of both optimism and cautiousness.
On the one hand, it is true that the manufacturing sector has been a bright spot in the economy since the recession, providing outsized contributions to both output and employment. Moreover, there is a sense that the sector is poised for continued expansion over the coming years, thanks largely to America’s newfound energy abundance and the increased competitiveness of the sector globally. As such, conversations with manufacturing leaders about the coming decade tend to be rather “bullish.”
This quarter’s National Association of Manufacturers (NAM)/IndustryWeek Survey of Manufacturers reflect this, as we have seen the highest expected sales (up 4.1 percent) and capital investment (up 2.3 percent) figures in two years.
Along those lines, manufacturers also see an improving economy (75.1 percent), new product development (57.3 percent) and increased efficiencies in the production process (48.6 percent) as the biggest drivers for future growth. In addition, over the next 12 months, nearly 40 percent of manufacturers expect their export sales to increase, with another 57.1 percent saying their international orders should stay the same.
However, manufacturers expressed a palpable sense of frustration both with the slowness of economic growth and with the political process. Washington’s burdensome regulatory, tax and health care policies still loom large in business decisions, particularly for the smallest manufacturers. While we have moved beyond the budget showdown of last fall, concerns continue to mount that Washington is not solving the country’s problems.
In the most recent survey, 79.3 percent of respondents said that the country was on the “wrong track,” with just 5 percent suggesting that it was “headed in the right direction.”