Small Business Week: GDP Numbers, Tax Reform Deliver a Boost to Small Businesses

This week is Small Business Week and, given that more than 90 percent of National Association of Manufacturers (NAM) members are small and medium-sized businesses, it’s an important time for all of us here at the NAM. Businesses large and small got a lift this week following U.S. economic growth of 2.3 percent, which bested the consensus estimate of 2.0 percent. Strong business investment growth of 7.3 percent year-over-year helped to drive the overall economic picture.

It makes sense. In the most recent NAM Manufacturers’ Outlook Survey 93.5 percent of manufacturers said they were positive about their own company’s outlook, the second-highest reading in the survey’s 20-year history. In addition, optimism among small manufacturers registered a new all-time high, with a reading of 94.5 percent. The factors behind this sky-high optimism include a new attitude out of Washington over the past few years that have resulted in pro-growth policies like regulatory reform and—significantly—tax reform. When it comes to small businesses in particular, there are several aspects of tax reform designed specifically to help them. Aside from the overall reduction in the tax rate, the new tax law includes, for instance, additional advantages for small business, such as allowing for deductions of the cost of new business equipment right away.  This will have an immediate impact by incentivizing investment in machinery and other technology.

Trade plays another critical role in the success of our nation’s small businesses. Indeed, of the nearly 73,000 manufacturing firms in the United States that engaged in export activities, more than 95 percent were small or medium-sized businesses. Of those approximately 70,000 businesses, more than 60 percent were manufacturers with fewer than 100 employees. Still, small business owners face an uphill battle in competing and succeeding in markets around the world. On April 11, Chuck Wetherington, president of BTE Technologies and the NAM’s Small and Medium Manufacturers Group vice chair, testified before the House Small Business Subcommittee hearing on the State of Trade for America’s Small Businesses. Wetherington detailed three proposals to improve trade prospects:  positive outcomes on NAFTA talks; Senate confirmation of the pending board nominees to return the Export-Import Bank to full functionality; and growing, tailoring and improving U.S. market and export promotion assistance.

All of those are good ideas. To support the success of small business, the NAM and its members will continue to push for other good ideas, too, to support the continued success of small manufacturers—whether in trade, taxes or infrastructure. We’re all in this together. And, here at the NAM, we all join together in celebrating the vital importance of small businesses to our country, to our communities and to the American economy overall.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM) and the Director of the Center for Manufacturing Research for The Manufacturing Institute, where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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