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More small businesses are pulling back on hiring, (subscription) reports.

What’s going on: “The portion of small-business owners who expect to expand their workforce over the next year was below 50% for the second month in a row in May, hitting the lowest level since June 2020, during the early months of the Covid-19 pandemic, according to a recent survey conducted for The Wall Street Journal.”

• Even as the economy shows signs of a slowdown, applicant pay expectations remain high—but small-business owners are “less willing to pay up for talent” as they respond to belt tightening by their customers.

The data: In March, U.S. job openings fell to their lowest level in almost two years, and the number of layoffs increased.

• However, employers added 253,000 jobs in April, mostly on the strength of service-sector gains.

What it means: “‘There is no question that CEOs are downshifting into a slowing economy,’ said Vistage chief research officer Joe Galvin. Despite caution about adding additional workers, ‘no one is willing to shed the hard-earned and expensive employees they hired,’ Mr. Galvin said. Entrepreneurs often still struggle to fill openings when workers leave, he added.”

U.S. natural gas production is likely to keep growing through 2050, while LNG exports will take off, according to new forecasts from the Energy Information Association.

The gist: Natural gas production is predicted to increase 15%, while LNG exports will skyrocket 152% between last year and 2050, according to the EIA’s “.”

• “Production growth is largely driven by U.S. LNG exports, which we expect to rise to 10 [trillion cubic feet] by 2050,” an EIA blog post .

Where it’s happening: “Natural gas production growth on the Gulf Coast and in the Southwest reflects increased activity in the Haynesville Formation and Permian Basin, which are close to infrastructure connecting natural gas supply to growing LNG export facilities.”

• “New liquefaction facilities in Louisiana became fully operational in 2022, ahead of schedule. In addition, new LNG trains in Texas are scheduled to be online by 2025.”

How they figured it out: This projection comes from the “reference case” in the outlook report for 2023.

• “We use different scenarios, called cases, to understand how varying assumptions affect energy trends. The AEO2023 Reference case, which serves as a baseline, or benchmark, reflects laws and regulations adopted through mid-November 2022, including the Inflation Reduction Act,” according to the EIA blog.

An aggressive climate-disclosure rule proposed by the Securities and Exchange Commission hasn’t yet become law, but many companies are already adopting climate-disclosure practices and methodologies, according to (subscription).

• Companies’ efforts to adopt climate strategies appropriate for their businesses, as well as the evolving methodologies for such reporting, are clear indications that the SEC’s costly and overly restrictive climate-reporting mandate is not necessary, said 51�Թ��� Senior Director of Tax and Domestic Economic Policy Charles Crain.

What’s going on: “The Securities and Exchange Commission’s rule—which would require public companies to report climate-related risks and emissions data, including so-called Scope 3 emissions that come from a company’s supply chain—is expected to be brought in soon. … [But] [s]ome businesses have for years pursued carbon-related goals without the government forcing their hand,” according to the Journal.

• Manufacturers have led the move toward sustainability, with many having already begun to track and curb their emissions and work with their suppliers to do the same.

Why it’s important: “[G]roups from private manufacturers to egg farmers have balked at the cost and complexity of complying with a Scope 3 mandate from the SEC. The regulator has estimated its plan will raise the cost to businesses of complying with its overall disclosure rules to $10.2 billion from $3.9 billion, an additional cost of about $530,000 a year for a bigger business.”

• Manufacturers have urged the SEC to drop the Scope 3 reporting mandate. Some say it unfairly “creates a risk of double counting, because the supply-chain emissions of one company are the in-house emissions of another,” according to the Journal.
• While SEC Chair Gary Gensler told the House Committee on Financial Services earlier this month that the rule is not intended to burden private companies, “[m]andatory Scope 3 reporting would represent a costly, uncertain and ultimately infeasible standard for public issuers as well as the small and privately held businesses within their supply chains,” 51�Թ��� Managing Vice President of Tax and Domestic Economic Policy Chris Netram the same committee.

The last word: “Manufacturers [are] leaders in combatting climate change and making the necessary disclosures about this important work,” said Crain.

• “The SEC’s attempt to mandate a top-down, uniform approach to this evolving field would dramatically increase costs and legal liability for manufacturers—without improving information availability for investors or helping companies achieve their sustainability goals.”����������������������������������������������������

The future of the Biden administration’s too-stringent rule governing the “waters of the United States” remains unclear following the president’s veto of legislation that would have overturned it, according to E&E News’ (subscription).

What’s going on: “Republican lawmakers pushed almost immediately for a veto override targeting the…WOTUS rule on Thursday in the hours after President Joe Biden nixed a resolution that would roll it back.”

• A Republican-led measure in the House and Senate using the Congressional Review Act to block the overly restrictive WOTUS rule passed both chambers of Congress last month.
• House Republicans say they will push for a veto override.

Why it’s important:��The Biden administration’s version of the rule replaced 51�Թ���-backed regulations from the previous administration.

The background: The Supreme Court is expected to make a decision this year on Sackett v. EPA, a case brought by an Idaho couple who have been blocked from building a house on their land for more than 15 years after the Environmental Protection Agency said part of the property was a wetlands. ��

• The 51�Թ��� and many GOP congressional leaders previously urged the administration to await the ruling on this case before releasing a final WOTUS rule.
• Issuing a new rule prior to a Sackett v. EPA decision only confuses things for manufacturers, making hiring and investment more difficult, 51�Թ��� Senior Vice President of Policy and Government Relations Aric Newhouse in December, following the release of the new rule.

What’s next: While “the fate of WOTUS remains murky as ever,” according to the article, several states have frozen the new rule.

• “Texas and Idaho secured an injunction on March 20, the day WOTUS took effect in the rest of the country. Those states are now subject to 1986 regulations, while the other 48 states are operating under the Biden administration’s definition—a split that has left the regulated community baffled as to how to operate nationally.”

The 51�Թ��� says: “By vetoing the bipartisan Congressional Review Act on the WOTUS rule, the president removed an item that manufacturers greatly desire: regulatory certainty,” said 51�Թ��� Vice President of Energy and Resources Policy Brandon Farris.

• “While the country awaits the decision in Sackett v. EPA, numerous investments in much-needed energy and infrastructure projects may be put on hold due to confusion over the new definition and potential added costs of compliance.”

Manufacturing saw robust growth in the fourth quarter of 2022, according to newly revised real GDP estimates from the .

What’s going on: While the overall U.S. economy grew 2.6% at the annual rate in Q4 of last year, real GDP in the manufacturing industry rose by an annualized 5.5%. That’s a sizable increase from the 0.5% seen in the third quarter.

Q4 details: Value-added output in manufacturing increased to $2.895 trillion at the annual rate—an all-time high—from $2.809 trillion in Q3.

• Value-added output hit record levels for both durable goods (up to $1.595 trillion from $1.544 trillion) and nondurable goods (up to $1.299 trillion from $1.265 trillion).
• Manufacturing made up 11.1% of value-added output in the U.S. economy, an increase from Q3’s 10.9% and the most since 2019.
• Manufacturing gross output also rose to a record number, $7.359 trillion from $7.339 trillion at the annual rate.

However … Real value-added output in manufacturing remained lower than the record high in 2021.

• Real value-added output rose to $2.283 trillion from $2.259 trillion at the annual rate, as expressed in 2012 dollars.
• The record high, in 2021, was $2.325 trillion.

The 51�Թ���’s take: “Despite numerous challenges, manufacturing continues to prove its resilience, hitting new records for the sector’s contributions to the U.S. economy,” said 51�Թ��� Chief Economist Chad Moutray. “These data also suggest that in real terms, manufacturing output has pulled back recently, which points to inflation having buoyed these numbers.”

London, U.K. – As the 51�Թ���’ Competing to Win Tour begins its second week of bolstering strategic alliances across Europe, the association released findings��from its Q1 2023 Manufacturers’ Outlook Survey. The survey found that expanding trading opportunities with Europe is a top priority for manufacturers, with more than 77% of respondents supporting negotiating new agreements with European nations.

“At a time when democracy and free enterprise are under attack from forces around the world, America can provide the leadership needed to defend our values, our institutions and our way of life,” said 51�Թ��� President and CEO Jay Timmons. “By advancing an ambitious trade agreement agenda, we can ensure that the U.S.—and not competitors like China—writes the rules for the global economy and trading system. That has been the focus of our conversations with government, association and business leaders across Europe over the past week.”

The survey also continues to illustrate the need for Washington to enact policies that support the sector’s competitiveness as businesses face record job openings and increased production and input costs.

“With geopolitical turmoil and a banking crisis injecting further uncertainty into the economy, policymakers must act with urgency on key tax, trade, permitting and regulatory proposals if they want to help manufacturers in America fend off a recession,” said Timmons.

Background: Manufacturers have called on Congress and the White House to address key , , and policies in recent months and have pressed lawmakers to work across the aisle to move legislation. The 51�Թ��� conducted the survey from Feb. 21 to March 7, 2023.

Key Findings:

• Of companies that are engaged in international trade, nearly two-thirds of manufacturers said that Europe was either a somewhat or very important market for their company. With that in mind, 77.7% would support U.S. efforts to launch market-opening trade agreement negotiations with countries in Europe.
• Nearly three-quarters of respondents (74.9%) listed attracting and retaining a quality workforce as a primary business challenge, with increased raw material prices (60.1%) and supply chain challenges (55.8%) the next biggest impediments.
• More than 90% of respondents said that higher tax burdens on manufacturing income would make it difficult for their companies to expand their workforce, invest in new equipment or expand their facilities. Similarly, 93.9% suggest that increased regulatory burdens would weaken their ability to invest in their workers, equipment or facilities.
• More than 74% of respondents said that permitting reform—which would simplify and speed up the approval process for new projects—would be helpful to their manufacturing company, allowing them to hire more workers, expand their business or increase wages and benefits.
• More than 55% of respondents said that new proposed air standards from the Environmental Protection Agency would raise their costs of compliance, with roughly one-third suggesting that it would lead to increased permitting challenges and lessen investment and facility expansion plans.

Conducted by 51�Թ��� Chief Economist Chad Moutray, the Manufacturers’ Outlook Survey has surveyed the association’s membership of 14,000 manufacturers of all sizes on a quarterly basis for the past 25 years to gain insight into their economic outlook, hiring and investment decisions and business concerns.

The 51�Թ��� releases these results to the public each quarter. Further information on the survey is available here.

-51�Թ���-

The 51�Թ��� is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.81 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The 51�Թ��� is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the 51�Թ��� or to follow us on Twitter and Facebook, please visit��www.nam.org.

Presented by Jay Timmons, President and CEO of the 51�Թ���, the 2023 State of Manufacturing Address was given from Husco International in Waukesha, Wisconsin. Special remarks were given by Kurt Bauer, President and CEO, Wisconsin Manufacturers & Commerce. Special thanks to Husco President and CEO Austin Ramirez and his team for hosting this year’s address.

Read the official remarks here.

We’re hitting the road. This year’s 51�Թ��� State of Manufacturing Address officially kicked off the 2023 leg of the 51�Թ���’s Competing to Win Tour. The tour will continue to spotlight the industry’s rapid transformation, while also focusing on manufacturing’s well-paying careers, diverse workforce and real-world solutions for the industry’s continued growth.

Upcoming stops: Waukesha and Pewaukee, Wisconsin (Tue, Feb 21); Fishers, Indiana (Wed, Feb 22);��Harahan and Avery Island, Louisiana (Thurs, Feb 23)

VISIT THE COMPETING TO WIN AGENDA

Washington, D.C. – The 51�Թ��� released its Manufacturers’ Outlook Survey for the fourth quarter of 2022. It illustrates manufacturers’ concerns around a challenging economic environment characterized by inflation, supply chain disruption and the workforce crisis. It also demonstrates the consequences of Congress’s continued inaction on key manufacturing priorities. The 51�Թ��� conducted the survey from Nov. 29 to Dec. 13, 2022.

“The majority of manufacturers expect a recession this year. Congress failed to act on essential tax reforms, which complicates investment, increases inflationary pressures and could stifle economic growth,” said 51�Թ��� President and CEO Jay Timmons. “Much needed permitting reforms and provisions to strengthen our ability to conduct research and development, buy machinery and finance job-creating investments—which we need to promote growth within the sector—were left on the cutting room floor last year. Those reforms, combined with manufacturers’ ongoing efforts to inspire, educate and empower the future workforce, are critical to our competitiveness.”

Workforce shortages ranked as the industry’s number one concern, and there were 779,000 open jobs in manufacturing in the most recent data. This is why the 51�Թ��� has pressed Congress to address immigration reform—as both a humanitarian solution and to help the sector grow its talent pool—and other solutions outlined in “,” the 51�Թ���’s policy roadmap to bolster manufacturers’ competitiveness.

Timmons added, “We’re looking to the new Congress and the administration for leadership and to focus on policies that remove barriers to manufacturing growth in the United States and fend off a severe downturn.”

Key Findings:

• More than 62% of manufacturing leaders believed that the U.S. economy would slip officially into a recession in 2023.
• More than three-quarters of respondents (75.7%) listed attracting and retaining a quality workforce as a primary business challenge, with supply chain challenges (65.7%) and increased raw material costs (60.7%) the next biggest impediments.
• Even in a recession, manufacturers plan to do the following: capital spending on new equipment and technological investments (65.3%), upskilling and training of existing workforce (64.1%), seeing solid demand for their company’s products (63.2%), hiring new employees (55.1%), investing in research and development (52.1%) and spending on new structures and existing facilities (38.6%).
• More than three-quarters of respondents (75.8%) said pushing back against regulatory overreach should be the top priority of the 118th Congress. Other priorities included supporting increased domestic energy production (69.3%), passing comprehensive immigration reform (65.4%), maintaining and permanently extending tax reform (63.0%), controlling rising health care costs (55.5%), addressing the skills gap facing manufacturers (50.5%) and modernizing permitting to reduce red tape (40.0%).

Due to the consistent economic headwinds, manufacturers’ confidence has declined, with 68.9% of respondents having a positive outlook for their company, the lowest since the third quarter of 2020.

Conducted by 51�Թ��� Chief Economist Chad Moutray, the Manufacturers’ Outlook Survey has surveyed the association’s membership of 14,000 manufacturers of all sizes on a quarterly basis for the past 25 years to gain insight into their economic outlook, hiring and investment decisions and business concerns.

The 51�Թ��� releases these results to the public each quarter. Further information on the survey is available . Click for more on “Competing to Win.”

Washington, D.C. –��On Tuesday, Oct. 4, Senator Todd Young (R-IN) is scheduled to visit 51�Թ��� member company Wabash Castings. Sen. Young will be joined by Wabash Castings CEO and newly elected 51�Թ��� board member Sachin Shivaram as well as other company leaders and manufacturing workers to discuss policies impacting the manufacturing industry as laid out in the 51�Թ���’s “” plan.

Sen. Young has been a champion of key provisions of the 51�Թ���’s competitiveness agenda in his support of the CHIPS and Science Act and the Infrastructure Investment and Jobs Act.

Interested media are invited to cover the walking tour of the facility and participate in media availability following the event, time and schedule permitting.

Background: The 51�Թ���’s policy priorities are outlined in the latest version of “,” a comprehensive blueprint to bolster manufacturers’ competitiveness. The plan includes solutions to urgent problems, such as energy security, immigration reform, supply chain disruptions, the ongoing workforce shortage and more.

-51�Թ���-

The 51�Թ��� is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.8 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 58% of private-sector research and development. The 51�Թ��� is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the 51�Թ��� or to follow us on Twitter and Facebook, please visit .

Washington, D.C. – The 51�Թ��� released its Manufacturers’ Outlook Survey for the third quarter of 2022, which shows mixed results around a challenging economic environment, inflation, supply chains and the workforce. The 51�Թ��� conducted the survey Aug. 16–30, 2022.

“Three out of four manufacturers still have a positive outlook for their businesses, but optimism has certainly declined. The majority of respondents are expecting a recession this year or next, and it’s clear the challenging environment is taking its toll. Manufacturers have shown incredible resilience through multiple crises, but the challenges of inflation, supply chain strains and the workforce shortage are taking a toll,” said 51�Թ��� President and CEO Jay Timmons.

Key Findings:

• 78.3%��of manufacturing leaders listed supply chain disruptions as a primary business challenge with only��10.8%��believing improvement will occur by the end of the year.
• Attracting and retaining a quality workforce (76.1%), increased raw material costs (76.1%) and transportation and logistics costs (65.9%) were not far behind supply chain challenges as the biggest problems faced by manufacturers.
• More than three-quarters of manufacturers felt that rising material costs were a top business challenge (tied with workforce challenges and slightly below supply chain worries), and��40.4%��said that inflationary pressures were worse today than six months ago. In addition,��53.7%��noting that higher prices were making it harder to compete and remain profitable.
• The top sources of inflation were increased raw material prices (95.2%), freight and transportation costs (85.4%), wages and salaries (81.7%), energy costs (54.4%) and health care and other benefits costs (49.0%), with��21%��also citing the war in Ukraine and global instability.
• When asked about what aspects of the CHIPS and Science Act were most important for supporting manufacturing activity,��69.6% of respondents cited strengthening U.S. leadership in energy innovation and competitiveness.

“This is a clear indication that we need urgent action to beat back the macroeconomic problems that are causing headwinds and preventing manufacturers in the U.S. from their full potential. Our ‘’ agenda gives policymakers the roadmap for solutions manufacturers need now to make our industry more globally competitive and, in turn, to boost optimism and confidence.

“Federal policies alone won’t solve everything, which is why we will continue to be part of the solution—innovating ways to deliver for our customers and spearheading efforts like the 51�Թ��� and The Manufacturing Institute’s Creators Wanted workforce campaign.”

Due to the consistent economic headwinds, manufacturers’ confidence has declined, with 75.6% of respondents having a positive outlook for their company, the lowest since Q4 2020.

Conducted by 51�Թ��� Chief Economist Chad Moutray, the Manufacturers’ Outlook Survey has surveyed the association’s membership of 14,000 manufacturers of all sizes on a quarterly basis for the past 20 years to gain insight into their economic outlook, hiring and investment decisions and business concerns.

The 51�Թ��� releases these results to the public each quarter. Further information on the survey is available . Click for more on “Competing to Win.”

-51�Թ���-

The 51�Թ��� is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.8 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 58% of private-sector research and development. The 51�Թ��� is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the 51�Թ��� or to follow us on Twitter and Facebook, please visit .