A recent survey by the National Association of Manufacturers (NAM) shows that concerns over rising health care costs, federal long-term fiscal challenges and increasing regulatory burdens continue to loom large for manufacturers.
According to the survey, small, medium and large manufacturers all noted implementation of the Affordable Care Act as a top concern, while many are still unaware of their premium costs for next year. In addition, fixing the long-term federal debt ranks as the top policy fix manufacturers would like to see from Washington.
Key survey findings:
- Nearly 75 percent of manufacturers identified rising health care and insurance costs as their most important challenge. There is a strong perception that these costs will rise significantly, particularly at the small and medium-sized level.
- Nearly 85 percent of manufacturers identify finding a long-term federal budget deal that tackles the debt as the top policy they would like to see from Washington.
- As the Federal Reserve begins to debate “tapering” its asset purchases, perhaps as soon as its September meeting, the survey asked manufacturers how concerned they were regarding the Federal Reserve’s “exit strategy.” On a scale from 1 to 10, with 10 being “extremely worried,” responses averaged a 6. This suggests at least a moderate degree of concern, but perhaps not as much as anecdotal evidence might have suggested.
- While manufacturers continue to be cautiously optimistic about growth, this survey shows an uptick in sales and production in recent months. However, along with hiring, this growth continues to be modest at best with only 20,000 additional manufacturing jobs added over the past 12 months.
- Moving forward, an NAM model suggests that manufacturing production could increase 3.5 percent at the annual rate over the next two quarters, which would indicate a pickup in activity from the current pace.
“Manufacturing leaders continue to worry about the long-term challenges confronting the nation, particularly on fiscal and monetary matters. In the short term, implementation of the Affordable Care Act remains manufacturers’ top concern, with a number of uncertainties outstanding,” said NAM Chief Economist Chad Moutray. “These uncertainties, combined with Washington’s current regulatory agenda, continue to hold back robust growth in the sector.”
The NAM/IndustryWeek Survey of Manufacturers was conducted among the NAM’s membership of small, medium and large manufacturers. Click here for the full survey results.