On March 31, 2017, National Association of Manufacturers’ (NAM) President and CEO, Jay Timmons, along with others from the manufacturing industry met with President Donald Trump. A major discussion point of this meeting was the recent release of NAM’s Q1 2017 Manufacturers’ Outlook Survey. The survey indicated that over 93% of manufacturers have a positive outlook on their own company’s future. This marks a record high level of optimism in the near 20-year history of NAM’s Manufacturing Outlook Survey. This high level of optimism is largely attributed to the belief that the Trump administration, along with Congress, will ultimately reduce the cost of doing business for manufacturers in the United States. It is believed this cost reduction will be achieved through the removal of unnecessary regulation surrounding manufacturing in the U.S. as well as providing much-needed tax cuts to U.S. manufacturers.
The optimism felt by U.S. manufacturers is resulting in increased anticipated hiring and capital spending. NAM survey respondents indicated that, over the next 12 months, they predict 2.1% growth in capital investments, a two-year high, and 2.3% growth in full-time employment. The anticipated increase in hiring is at its highest level since Q2 of 2011.
While optimism among NAM survey respondents is nearly unanimous, not everyone is in agreement that the U.S. is headed in the right direction. Approximately 40% of respondents believe the U.S. is on the “wrong track” (9%) or were unsure as to whether or not the country is headed in the right direction (31%). Respondents cited concerns over the new political environment, including the future of foreign trade policies.
As we near the end of Trump’s first 100 days in office, it is clear the outlook for the U.S. manufacturing industry is optimistic. However, only time will tell whether or not the new administration will be able to enact its proposed changes while maintaining a sound political environment and turn the current optimism into actual results.