51�Թ���

Washington, D.C. – Following the Securities and Exchange Commission’s decision to finalize its costly and unnecessary stock buybacks rule, 51�Թ��� Managing Vice President of Tax and Domestic Economic Policy Chris Netram released the following statement:

“The 51�Թ��� is disappointed that the SEC has chosen to unjustifiably punish manufacturers for returning capital to their shareholders. Manufacturers, investors, retirement plans and the entire economy benefit when companies can efficiently allocate capital via share repurchases. The 51�Թ��� was successful in convincing the SEC to abandon the most damaging aspect of its initial proposal, but the commission’s attempt to discourage these commonplace, commonsense transactions via an overly complicated, expensive and unworkable disclosure mandate is nevertheless a departure from its mission to enhance capital formation and protect investors.”

-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 .

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.”

Washington, D.C. – 51�Թ��� President and CEO Jay Timmons released the following statement regarding negotiations to raise the debt ceiling:

“It is imperative that Congress and the administration reach a resolution to the debt limit issue as swiftly as possible. Waiting to act until extraordinary measures are exhausted constitutes dangerous brinkmanship that would inject uncertainty into the global economy and increase the risk of a default that would derail manufacturing growth in America, tank markets and put jobs at risk.

“We did not become the greatest nation in the world by shirking our responsibilities. Manufacturers have been working overtime to rebuild our economy, strengthening supply chains, creating jobs at record rates and helping defend against threats from around the world. All of those achievements will be erased if the United States does not find a path forward on the debt limit and fiscal responsibility. Let’s rise above this challenge so that manufacturers can do what we do best: improve lives and livelihoods here and around the world.”

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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 12.9 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 .

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. – The 51�Թ��� released a new on the damaging impact of the Securities and Exchange Commission’s attempt to force private companies to disclose financial information publicly.

The SEC’s new rule interpretation would apply to private companies that raise capital via corporate bond issuances under SEC Rule 144A. If the new interpretation takes effect as scheduled in January 2023, these businesses will face decreased liquidity and increased borrowing costs—leading to significant job losses and a decline in U.S. GDP.

Key Findings:

These impacts will be felt across the economy, resulting in 30,000 jobs lost each year over the first five years the new interpretation is in effect. The job losses will increase over time—rising to 50,000 jobs lost each year after five years and 100,000 jobs lost each year after 10 years.

These job losses are attributable directly to the decreased liquidity and increased borrowing costs associated with the SEC’s new interpretation.

51�Թ��� Speaks Out:

51�Թ��� Managing Vice President of Tax and Domestic Economic Policy Chris Netram released the following statement:

“At a time of rising interest rates and economic uncertainty, manufacturers cannot afford for the SEC to roil the bond markets arbitrarily. With tens of thousands of jobs at stake, the SEC must act by year’s end to reverse this misguided interpretation.”

51�Թ��� Action:

Today, the 51�Թ��� and the Kentucky Association of Manufacturers are filing two for with the SEC seeking to stop the harm this new rule interpretation would cause.

The 51�Թ��� and the KAM are calling on the SEC to reverse course by clarifying—either by rule or by exemptive order—that Rule 144A issuers are not required to make public financial disclosures. The 51�Թ��� and the KAM are also seeking emergency interim relief to prevent the new interpretation from taking effect in January.

Background:

• SEC Rule 15c2-11 requires broker dealers to ensure that key information about issuers of over-the-counter equity securities is current and publicly available prior to quoting those issuers’ securities freely.
• SEC Rule 144A allows for resales of securities (primarily corporate debt issuances) to qualified institutional buyers—large financial institutions that own or manage more than $100 million in securities. Retail investors cannot purchase Rule 144A securities. Notably, under Rule 144A, issuers are obligated to make their financial and operational information available to QIBs.
• In September 2021 and December 2021, the SEC’s Division of Trading and Markets issued no-action letters applying Rule 15c2-11 to Rule 144A debt; the new requirements take effect in January 2023. This decision contradicted the historical application of Rule 15c2-11 to OTC equity securities and bypassed important rulemaking safeguards required by the Administrative Procedure Act.
• The 51�Թ��� has weighed in with the and seeking to reverse this damaging interpretation.

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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 12.9 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 www.nam.org.

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 .

Washington, D.C. – The 51�Թ��� released its Q1 2022 Manufacturers’ Outlook Survey, which shows manufacturers’ significant concerns around inflation, hiring and potential tax increases. The 51�Թ��� conducted the survey Feb. 11–25, 2022.

Key Findings:

• 88.1% of respondents cited supply chain challenges as a primary business challenge in the first quarter, 85.7% cited increased raw material costs, and 79.0% cited the inability to attract and retain a quality workforce.
• 88.6% of respondents said their company would find it more difficult to expand their workforce, invest in new equipment or expand facilities if the tax burden on income from manufacturing activities increased.
• 89.4% had unfilled positions within their companies for which they were struggling to find qualified applicants.

“The humanitarian crisis and economic disruptions of Russia’s war on Ukraine, as well as the resulting sanctions that manufacturers fully support, will exacerbate these supply chain challenges and could impact energy costs even more as we move into the second quarter. We’re looking to policymakers to take bold action, while manufacturers do everything in our power to help the nation and world persevere through another crisis,” said 51�Թ��� President and CEO Jay Timmons.

“Federal leaders should give energy manufacturers the tools to ramp up production here at home and improve our energy security. At the same time, we need Congress to finish the China competition bill to increase domestic semiconductor production and bolster supply chains, among other manufacturing priorities. Any discussion of raising taxes on manufacturers will create uncertainty and make it difficult to invest, hire and expand, hurting the broader economy.

“Although job growth last year rose at the best pace since 1994, and wage growth is now at a 40-year high, the survey shows workforce shortages are still a major challenge. That’s why the 51�Թ��� and The Manufacturing Institute continue leading our industry-wide Creators Wanted campaign—to inspire, educate and empower the manufacturing workforce of today and tomorrow.”

While manufacturers remain mostly optimistic in their economic outlook (88.8%, up from 86.8% in Q4), the survey was conducted prior to the Russian invasion of Ukraine.

-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 12.5 million men and women, contributes $2.57 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector 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 www.nam.org.

Washington, D.C. – The 51�Թ��� released its Manufacturers’ Outlook Survey for the fourth quarter of 2021, showing manufacturers remain mostly optimistic in their economic outlook (86.8%, down from 87.5% in Q3) but are significantly concerned with issues like inflation, hiring and potential tax increases targeting manufacturers.

“Manufacturers are working overtime to fill more than 1 million open jobs, including through our nationwide Creators Wanted workforce campaign,” said 51�Թ��� President and CEO Jay Timmons. “On top of that, we’re grappling with a supply chain crisis. Despite the challenges confronting us, manufacturers remain bullish on the future. But if Congress passes legislation with taxes that hit manufacturers harder than other industries, our entire recovery will be thrown off course. If new taxes land on our shoulders, it will undo all the progress we’ve made since the 2017 tax reform law.”

“Manufacturers have kept our promise to hire more workers, raise wages and benefits and invest in our communities. Our question to Congress—the message of this survey—is, do we want to weaken our recovery by undermining manufacturers’ competitiveness? Raising taxes on manufacturers will not help us build back better. It will tear down what we’ve achieved.”

Key survey highlights:

• Top issues:
  • Increased raw material costs (87.1%), the number-one issue for the fourth straight quarter
  • Supply chain challenges (84.5%)
  • Attracting and retaining a quality workforce (82.7%)

• 87.8% of respondents said an increased tax burden on income from manufacturing activities would make it more difficult to expand their workforce, invest in new equipment or expand their facilities
• 85.2% said they have open positions they cannot fill.
• 73.6% of respondents said supply chain bottlenecks negatively impacted their company’s outlook for production, hiring and overall business activity.

Read the full Q4 2021 Manufacturers’ Outlook Survey results here.

Background on manufacturing growth following the enactment of 2017 tax reform:

• In 2018, manufacturers added 263,000 new jobs. That was the best year for job creation in manufacturing in 21 years.
• In 2018, manufacturing wages increased 3% and continued going up—by 2.8% in 2019 and 3% in 2020. Those were the fastest rates of annual growth since 2003.
• Manufacturing capital spending grew 4.5% and 5.7% in 2018 and 2019, respectively.
• Overall, manufacturing production grew 2.7% in 2018, with December 2018 being the best month for manufacturing output since May 2008.

-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 12.5 million men and women, contributes $2.52 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector 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 www.nam.org.

For Big Ass Fans, a Kentucky-based company that manufactures fans, evaporative coolers and controls for industrial, agricultural, commercial and residential use, the eye-catching name isn’t the only thing that makes them distinctive. The company is also a leader in research and development, crediting U.S. tax policy with supporting its innovations and the jobs they create.

Investing in innovation: BAF has spent millions of dollars in R&D, even building an R&D lab on its global headquarters campus in 2008. Most recently, it pioneered new ways of disinfecting air to keep manufacturing employees healthy during the COVID-19 pandemic. And when Congress approved tax reform in 2017—including a lower corporate tax rate—the company got additional fuel for its efforts.

• “The more incentives that are there for us to create and for our customers to purchase, the more we can deliver for everyone,” said BAF Government and Public Relations Director Alex Risen.

Risen cautions, however, that a higher corporate tax rate could impact the company’s ability to grow. Meanwhile, a prospective tax change on R&D spending could stymie innovation by requiring the amortization of expenses (as opposed to current tax policy, which allows expenses to be fully deducted in the same year).

• “We’re always going to innovate. That’s in our DNA. But if our customers have higher corporate tax rates, that can take money out of our pockets and theirs,” said Risen. “If this new R&D tax policy detracts from a company’s ability to push and pioneer…then we’re all at risk of losing out on expedited innovation.”

Creating American jobs: BAF isn’t just using its revenues to invest in innovation; it’s also working to bring jobs and supply chains into the United States. In addition to its headquarters in Lexington, Kentucky, the company has offices in Canada, Australia and Singapore. Up until recently, it also had a manufacturing facility in Malaysia in addition to a sales office there—but BAF is in the process of moving those production jobs to the United States.

• “It doesn’t just mean new jobs at BAF; it brings more business to American vendors and suppliers,” said Risen. “It allows them to continue trying to grow even during a downturn and uncertain times.”

Bolstering supply chains: In addition to job creation, strengthening the supply chain was another top priority for BAF.

• “We were already working on moving those operations before the pandemic hit, but the pandemic is a reminder that you want to have that supply chain close,” said Risen. “We’ve been fortunate that we haven’t had to slow production down, because the majority of our product is here in our backyard. That speaks to where we want to be as a company that is internationally headquartered in the U.S. but serves 175 countries. We want to do our part in order to make high-end machinery a U.S. export.”

51�Թ��� support: To support companies like BAF and its customers, the 51�Թ��� is leading the effort to ensure that the tax code keeps encouraging innovation. Recently, a bipartisan group of U.S. policymakers introduced legislation that would allow manufacturers to continue to deduct their R&D expenses immediately—a move that the 51�Թ��� advocated for. The 51�Թ��� is also working to strengthen U.S. supply chains, releasing an for such actions last year.

The bottom line: “A high tide floats all boats,” said Risen. “We need to continue to innovate and deliver for companies in America—and we need to help Americans push the envelope, innovate and deliver for all of us.”

Manufacturing is a key driver of the American economy—but how does manufacturing in the United States stack up against the rest of the world?

Recently, The Manufacturing Institute and KPMG—a professional services firms providing innovative business solutions and audit, tax, and advisory services—released a new assessment of the cost of doing business in the manufacturing sector for the United States and 16 other major manufacturing exporting nations around the globe.

High costs, but high value: The study found that primary costs (compensation, property, utilities, taxes and interest rates) in the U.S. are on average 16% higher than in the other markets—yet the U.S. ranks fairly high on the list overall at #5.

• Another number bears that out: over the past decade, in U.S. manufacturing has jumped from $569.3 billion in 2006 to a record $1,785.7 billion in 2019.

The benefits of tax reform: Tax reform made the U.S. a more desirable location for manufacturers, the study found. It compared how the U.S. would have ranked with its pre-reform corporate tax rate of 40% (the combined federal and state tax rate) instead of the post-reform corporate rate of 27%. With the old rate, the U.S. would have ranked only 11^th.

The benefits of skilled workers: A major U.S. advantage is its supply of high-skilled workers. According to the study, the U.S. ranks at the top of the list for real value added per employee, along with Ireland and Switzerland. As manufacturing has become increasingly advanced, the need for sophisticated employees keeps growing.

While it’s true that American manufacturing requires more skilled workers, as The Manufacturing Institute has previously shown, the existing workforce is still a big draw due to its productivity.

The bottom line: The United States is an attractive location for manufacturers, despite relatively high costs, because of high worker productivity and the overall business environment.

The last word: “We need to continue to push the envelope of technological innovation and workforce development and recruitment in the manufacturing sector,” said Chad Moutray, chief economist for the 51�Թ��� and director of the Center for Manufacturing Research at The Manufacturing Institute. “These efforts will serve to strengthen the sector overall, but also help to maintain the nation’s global competitiveness.”