Sixty-two percent of manufacturers expect the U.S. economy to enter a recession this year, according to a survey conducted by the National Association of Manufacturers (NAM).
The survey also found that 69 percent of manufacturers have a positive outlook for their company, the lowest figure since the third quarter of 2020. They cited struggles in attracting and finding workers, continued supply chain snags and high raw material costs.
It’s the latest warning sign that the U.S. manufacturing industry is slowing down amid weakening demand and higher borrowing costs stemming from the Federal Reserve’s interest rate hikes.
The Institute for Supply Management said Wednesday that manufacturing contracted for the second straight month in December and reached its weakest point since May 2020.
To add insult to injury, some of manufacturers’ top priorities fell flat at the end of last Congress, including changes to taxes, permitting and immigration policy.
Congress refused to scrap new rules implemented this year as part of Republicans’ 2017 tax bill that require companies to spread out their research and development tax deductions over five years rather than write them off immediately. Large manufacturers including Ford and Boeing lobbied lawmakers to reverse the new rules, warning that they would lead to layoffs.
Lawmakers also rejected a proposal from Sen. Joe Manchin (D-W.Va.) to streamline the permitting process for energy projects, a top priority for manufacturers that drew opposition from many environmental groups.
“Much needed permitting reforms and provisions to strengthen our ability to conduct research and development, buy machinery and finance job-creating investments — which we need to promote growth within the sector — were left on the cutting room floor last year,” NAM President and CEO Jay Timmons said in a statement.
The NAM survey was conducted from Nov. 29 to Dec. 13 and received 337 responses.