The National Association of Manufacturers (NAM) released a survey this week that revealed regulatory and tax policies are weighing on the American manufacturing industry ahead of President Biden’s State of the Union Address on Thursday night.
NAM’s Manufacturers’ Outlook Survey for the first quarter of 2024 found that two-thirds of manufacturers said that the Biden administration’s regulations will be costly to implement, and that the regulations will take significant time to understand and comply with. The influx of regulations has put a damper on their outlook for their business outlook, as the survey found elevated concern about the business climate near levels last seen in late 2016.
“Manufacturers’ concerns in this survey should provide a stark warning to both parties ahead of the State of the Union: If you want to continue America’s manufacturing resurgence, focus on constructive policies to strengthen our industry – reinstating key tax provisions, achieving immigration solutions and advancing permitting reform,” NAM President Jay Timmons said in a press release.
“But if President Biden wants to put his manufacturing legacy at risk, nothing will do that faster than raising taxes on manufacturers or continuing this regulatory onslaught,” Timmons added.
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A near three-fourths majority of respondents, 72.4%, said that length of the current permitting reform process affects their investment decisions to various degrees, with 38.9% suggesting that they were extremely or moderately impacted. In NAM’s surveys throughout last year, manufacturers said that reform could allow them to hire more workers, expand their business and increase wages and benefits.
Nearly 94% of respondents to the latest survey said it was important for the federal tax code to help manufacturers lower costs associated with research and development, accessing capital through business loans and investing in capital equipment purchases, with 58% saying it was very important.
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Federal tax incentives that allowed companies to fully expense R&D costs, deduct interest and expense capital investments expired over a year ago.
NAM’s survey found that nearly 40% of respondents pulled back on hiring and investing due to increased taxes, and NAM noted that it expects this number to rise if the tax incentives are not reinstated soon.
Timmons said that the president and Sen. Katie Britt, R-Ala., who will be delivering the Republican response to Biden’s State of the Union Address, should take action to address manufacturers’ regulatory and tax policy concerns to help spur American businesses.
“President Biden and Sen. Britt will opine on their parties’ respective priorities, many of which manufacturers share. But actions speak louder than words. Congressional inaction and the stream of senseless regulations from the EPA and elsewhere are creating greater uncertainty for businesses, which hurts manufacturers’ ability to create jobs and raise wages,” he said.
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“Our commitment is to work with anyone who will put policy – policy that supports people – ahead of politics, personality or process,” Timmons said.