Manufacturers’ Third Quarter Outlook Shows Continued Supply Chain Issues, Growing Workforce Needs and Rising Costs
Washington, D.C. – The National Association of Manufacturers 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 NAM 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 NAM President and CEO Jay Timmons.
- 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 ‘Competing to Win’ 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 NAM 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 NAM 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 NAM releases these results to the public each quarter. Further information on the survey is available here. Click here for more on “Competing to Win.”
The National Association of Manufacturers 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 NAM 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 NAM or to follow us on Twitter and Facebook, please visit www.nam.org.