A new survey from the National Association of Manufacturers (NAM) found that optimism among small- and mid-sized firms remains below average.
NAM’s Manufacturers’ Outlook Survey for the fourth quarter revealed that small companies with fewer than 50 employees were 65.9 percent optimistic about their outlook, while 63 percent of and medium-sized firms with between 50 and 499 employees were optimistic. Overall, 66.2 percent of respondents felt either somewhat or very positive about their company’s outlook, edging up slightly from 65.1 percent in the third quarter. However, it was the fifth straight reading below the historical average of 74.8 percent.
“It’s clear that Congress’ failure to enact pro-growth tax policies to support innovation and investment before year-end is affecting the manufacturing outlook,” NAM President and CEO Jay Timmons said. “Combined with the ongoing regulatory onslaught from the Biden administration, we’re facing economic headwinds that threaten all of the bipartisan wins achieved in recent years.”
Among the key findings. 89 percent of respondents said higher tax burdens on manufacturing activities would make it more difficult to expand their workforce, invest in new equipment or expand facilities. Also, 71 percent cited the inability to attract and retain employees as their top primary challenge. Other challenges included a weaker domestic economy and sales for manufactured products (63.7 percent), an unfavorable business climate (61.1 percent) and rising health care and insurance costs (59.8 percent).
The NAM has urged Congress to restore three critical manufacturing tax policies: immediate R&D expensing, a pro-growth interest deductibility standard, and full expensing. It said these tax policies are critical to empowering manufacturers to grow their operations, hire more workers, increase wages, expand facilities and invest for the future.