New Survey Says Manufacturers are Frustrated but Optimistic
The results of a recent survey by the National Association of Manufacturers and IndustryWeek found that manufacturers across the country expressed both frustration and optimism about the future of the manufacturing industry. The survey, which polled manufacturers from numerous sectors, found that they were mostly optimistic about their own work forces and their ability to grow their business, but were frustrated with policies coming from Washington and with political gridlock.
The manufacturing industry experienced disappointingly sluggish growth during the first half of the year. Affected by a particularly weak first quarter driven partly by severe winter storms across the country, the real gross domestic product (GDP) was up only an annualized 1% for 2014. However, after a grim first quarter, manufacturing activity in the United States has seen a significant rebound, and the Institute for Supply Management’s purchasing manager’s index is currently at a 3-year high. Meanwhile, manufacturing in August increased 4.9% year-over-year. This combination of a rough first quarter with improved prospects for the future may have something to do with the lingering cloud of frustration tinged with a silver lining of optimism expressed by many of the manufacturers surveyed.
When asked to list their primary current business challenges for the third quarter, 77% cited rising health care and insurance costs, while 73% cited an unfavorable business climate, including taxes and regulations. Only 49.8% said that attracting and retaining a quality workforce was one of their primary challenges, a number that was up a bit from the second quarter but still under 50%.
When discussing health care and insurance, only 36.7% of manufacturers surveyed said that they were planning to continue to offer the same plan next year that they had offered previously. 55.8% said that they would increase co-pays and deductibles, while 54.4% said that they would increase the employee share of premiums.
In spite of frustrations, however, manufacturer optimism was at its highest since the first quarter of 2012. Optimism among manufacturers has shown an upward trend since hitting a low of 70.1% in the first quarter of 2013, and in this survey 87.3% of manufacturers polled said that they had a positive outlook for their own company. This optimism may have something to do with the fact that sales are expected to grow 4.4% on average over the next 12 months, an estimate that was up from 4.1% on last quarter’s survey.
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