NAM/IndustryWeek Survey Shows Manufacturers’ Optimism at Odds with Deep Frustration Regarding Washington

Survey Reveals High Levels of Concern with Rising Health Care Costs and Increased Labor Regulations

The latest National Association of Manufacturers (NAM)/IndustryWeek Survey of Manufacturers shows manufacturers continue to face significant challenges due to policies emanating from Washington, including a broken tax code and energy regulations, and remain extremely frustrated as a result. While manufacturers continue to be mostly upbeat, their optimism can be tied to confidence in their own workforce and ability to grow their business in the face of increasing regulatory burdens and rising health care costs.

Those rising health care costs maintained its ranking as the top business challenge for manufacturers in the United States. This issue has ranked the highest in terms of primary challenges all year. In addition, manufacturers remain deeply concerned about a hostile environment for business caused by a host of issues, including a broken tax system and overregulation.

Importantly, manufacturers relayed serious concern with the growing number of actions taken by the Obama Administration in the labor arena. Among the more high-profile actions, President Obama has issued an executive order that would potentially blacklist contractors with labor and safety infractions from the previous three years, the National Labor Relations Board is set to finalize a regulation to speed up the union election process, and the Department of Labor is revising overtime regulations in the Fair Labor Standards Act.

“The cloud of frustration with Washington clearly is hanging over the heads of manufacturers,” said NAM Chief Economist Chad Moutray. “Despite a mostly optimistic assessment of demand and output over the coming months, increasing health care costs and labor regulations have manufacturers deeply concerned, and many said these burdens will impact their future hiring decisions. Pro-growth policies and a thoughtful approach to regulation are the right answers to putting our sluggish economic recovery on a consistent upward trajectory.”

Key survey findings include the following:

  • More than 77 percent of manufacturers identified rising health care and insurance costs as their most important challenge.
  • More than 85 percent of respondents said they believe their health care costs will increase by at least 5 percent—a harmful reality, particularly for small businesses.
  • More than half said they would be forced to increase health care copays and deductibles (55.8 percent) and/or increase the share of premiums paid by employees (54.4 percent).
  • Due to increased labor regulations, roughly one-quarter of respondents said they would be less likely to hire in the coming 12 months, with essentially the same percentage noting that they would be less likely to bid on federal contracts.

The NAM/IndustryWeek Survey of Manufacturers was conducted among the NAM’s membership of small, medium-sized and large manufacturers. Click here for the full survey results.

The NAM’s Growth Agenda spells out policies to keep manufacturing competitive. Click here to learn more.