in the latest NAM Manufacturers’ Outlook Survey, 67.0% of respondents felt either somewhat or very positive in their company’s outlook, down from 74.7% in the first quarter. Nearly 57% of manufacturers believed that the U.S. economy would experience a recession over the next 12 months. Roughly 10% felt that the economy would avoid a recession, with 32.9% uncertain.
Respondents expect sales to rise 1.6% over the next 12 months, the slowest pace since Q2 2020 (or Q2 2016 excluding the pandemic). Large manufacturers felt more upbeat in their sales expectations than small and medium-sized firms.
More than 74% of manufacturers cited the inability to attract and retain employees as their top primary challenge. This was followed by a weaker domestic economy (55.7%), rising health care costs (53.1%), an unfavorable business climate (52.1%), increased raw material costs (50.8%) and supply chain challenges (44.9%).
Concern about an unfavorable business climate was the highest in six years (Q2 2017). Sixty-five percent of manufacturers would purchase more capital equipment if the regulatory burden on manufacturers decreased. In addition, more than 63% of manufacturers report spending more than 2,000 hours per year complying with federal regulations, with 17.1% spending more than 10,000 hours annually.
Moreover, 88% of respondents said that higher tax burdens on manufacturing activities would make it more difficult to expand their workforce, invest in new equipment or expand facilities.
