THE END IS NEAR (Manufacturers Say about Pandemic)
Optimism among manufacturers is at its highest level in two years, according to the National Association of Manufacturers’ (NAM) first Manufacturers’ Outlook Survey of 2021.
The survey showed manufacturers’ optimism increasing to nearly 88%, up from 74% in the Q4 2020 survey. NAM said this represented an increase of 54 percentage points since the dark days of Q2 2020.
“As vaccines roll out at a faster pace and we see signs of an improving economy, manufacturers’ optimism is rising fast,” NAM President and CEO Jay Timmons said. “Our industry is creating new jobs and investing in new projects, buoyed by signs that we may finally be getting COVID-19 under control.”
Contributing to manufacturers’ positive outlook were their expectations for growth in sales, full-time employment, capital investments, productivity, exports and other metrics in 2021. In most cases, their expectations for these categories were at their highest levels since 2018. Overall, 68% of manufacturers anticipated that their revenues will be back to pre-pandemic levels by the end of 2021.
NAM’s survey of 450 executives with small, medium and large manufacturers also revealed some concerns. The top five were:
- Increased raw material costs (76% of respondents)
- Attracting and retaining a quality workforce (66%)
- Rising healthcare/insurance costs (51%)
- Transportation and logistics costs (50%)
- Supply chain challenges with inventory management (49%)
“Of course, our industry knows we are not out of the woods yet,” Timmons added. “That’s why we continue to lead by example, wearing face coverings and promoting vaccination. The smart health protocols are more important than ever. This is our shot — not just to end the pandemic but to build a new and stronger economy that creates opportunity for all.”
The NAM survey also asked manufacturers about activities in Washington, D.C., that could impact them. It found that 87% said their company would find it “more difficult to expand their workforce, invest in new equipment or expand facilities if Congress increased the tax burden on income from manufacturing activities. Likewise, if lawmakers adopted policies that provide tax incentives for manufacturing investment in the United States [for activities such as workforce training, research and development, capital equipment purchases or debt financing new investments], more than 80% responded that their company would find it easier to expand their domestic workforce.”
Meanwhile, 71% said passage of a major infrastructure bill would have a positive impact on their business plans.
The complete Q1 report can be downloaded here.