Manufacturers appear to be more optimistic in 2018 than they have been in at least two decades.
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The National Association of Manufacturers (NAM) quarterly outlook survey showed that in the third quarter, 92.5 percent of manufacturing executives had a positive outlook for their business. In 2018, manufacturers are on track to record their highest confidence levels in the survey’s 20-year history, thanks in part to the Trump administration’s economic agenda, which included comprehensive tax reform and reduction in regulations. Over the past four quarters 94 percent of industry leaders, on average, were optimistic about their prospects.
Manufacturing employers expect full-time employment opportunities to grow by 2.5 percent over the next year, while capital investments are estimated to rise by 3.4 percent.
“Tax reform and regulatory relief have spurred strong manufacturing growth, and manufacturers are now investing in our communities, hiring more Americans and raising wages and benefits,” NAM president and CEO Jay Timmons said in a press release.
Employers are expecting to raise wages by 2.7 percent over the next year – the fastest pace since 2001 – as attracting high-quality talent remains difficult.
Nearly three-quarters of manufacturers said a shortage of qualified workers was their top challenge, as the unemployment rate dropped to 3.7 percent in September – the lowest level in nearly 50 years. In response to the labor shortage, some companies reported turning down new business and holding off on expansion plans.
NAM says the worker shortage is evolving into “a full-blown workforce crisis.” A number of industries, including trucking, construction and airlines, are raising pay to combat the same problem.
In September, the U.S. economy added 18,000 manufacturing jobs, the Labor Department said on Friday.