The National Association of Manufacturers (NAM) unveiled findings from its latest Survey this week, shedding light on the challenges faced by the American manufacturing sector. The survey, conducted for the first quarter of 2024, underscores the impact of regulatory and tax policies on the industry. As President Biden prepares for his State of the Union Address, these insights offer critical perspectives on the current state of manufacturing in the United States.

Manufacturers’ Outlook Reveals Regulatory and Tax Concerns

According to the Manufacturers’ Outlook Survey, two-thirds of manufacturers expressed apprehension regarding the regulatory landscape shaped by the Biden administration. The survey indicates that these regulations are not only perceived as costly to implement but also demand significant time and resources for compliance. Consequently, manufacturers’ outlook on business has been dampened, with concerns about the business climate reaching levels reminiscent of late 2016.

NAM President Jay Timmons emphasized the urgency for constructive policies aimed at strengthening the industry. He highlighted reinstating key tax provisions, addressing immigration challenges, and advancing permitting reform as crucial steps toward sustaining America’s manufacturing resurgence. Timmons warned against measures that could jeopardize this progress, particularly cautioning against tax increases on manufacturers and the continuation of regulatory pressures.

Impact of Regulatory Processes on Investment Decisions

A substantial majority of respondents, approximately 72.4%, cited the length of the current permitting reform process as a factor influencing their investment decisions. Nearly 38.9% of manufacturers indicated being significantly or moderately impacted by this issue. Previous surveys conducted by NAM underscored the potential benefits of reform, including the ability to expand operations, hire more workers, and improve wages and benefits.

Urgent Need for Tax Code Support

The survey highlighted the critical role of the federal tax code in alleviating costs associated with research and development (R&D), accessing capital through business loans, and investing in capital equipment purchases. Nearly 94% of respondents emphasized the importance of tax support for manufacturers, with 58% deeming it very important. However, federal tax incentives facilitating these aspects expired over a year ago, prompting concerns among businesses.

Call for Action to Address Industry Concerns

NAM President Jay Timmons urged President Biden and Sen. Katie Britt, R-Ala., who will deliver the Republican response to the State of the Union Address, to take concrete steps to address manufacturers’ regulatory and tax policy concerns. Timmons emphasized the adverse effects of congressional inaction and the proliferation of regulations, emphasizing their detrimental impact on businesses’ ability to create jobs and enhance wages.

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