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Andrew Clark

As Tax Day Arrives, Evidence Shows Tax Reform Is Still Jet Fuel for U.S. Manufacturing Growth

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As millions of Americans face the first tax day filing deadline completely covered under the new tax reform law, U.S. manufacturers are continuing to see sustained growth due to the overhauled tax code nearly a year and a half after its passage. 

Economic data since tax reform was signed into law points to a stunning and quick turnaround. The U.S. economy grew 3.1% from the fourth quarter of 2017, when tax reform was signed into law, to the fourth quarter of 2018, the fastest year-over-year growth in nearly fifteen years. Moreover, business investment spiked 6.9% in 2018, the strongest reading in five years.

The enactment of tax reform, which replaced an outdated system with a more competitive tax code, served as rocket fuel for the U.S. manufacturing industry in particular. U.S. manufacturers created more than a quarter million jobs in 2018, the best year for job creation since 1997, and manufacturing production skyrocketed to the highest level in a decade. A National Association of Manufacturers (NAM) industry-wide survey from April 2018 found that 86% of manufacturers were already planning to increase investments due to the changes and more than two thirds reported plans to increase wages and benefits. 

According to an NAM Outlook survey released in December, last year was the most optimistic year for manufacturers on record. A similar survey from March found the industry has enjoyed nine consecutive quarters of record optimism, largely due to the tax law. 

“Tax reform sparked the robust manufacturing job growth manufacturers predicted,” NAM Chief Economist Chad Moutray said.

Through its “Keeping Our Promise” campaign, the NAM has reported on dozens of stories of small and large manufacturers across America who have raised wages, increased hiring, and invested in new production due to the tax law.

“Tax reform has provided a tremendous boost to the men and women who make things in America,” NAM Vice President of Tax and Domestic Economic Policy Chris Netram said. “Manufacturers are enjoying historic levels of business optimism and have created jobs at the fastest pace in decades.”

However, while tax reform has sparked a surge in U.S. manufacturing, Netram also warned that efforts by politicians in Washington to roll back the law would directly threaten the past year and a half of record growth. 

Indeed, the March 2019 NAM survey found that, when asked about the impact of Congress potentially repealing pro-growth provisions in the tax law, two-thirds of respondents would consider reducing capital investments in the United States, and 54% and 62% said it might force them to have to scale back employment and wages and bonuses, respectively.

“It’s clear that adopting a more competitive tax system has boosted the industry,” Netram said. “It’s also clear that rolling back the benefits of tax reform would make it more difficult to further grow our thriving American manufacturing sector.”

President Trump Just Signed Two Executive Orders To Speed Up Energy Infrastructure Projects

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In a big win for U.S. manufacturing workers, President Trump signed two long-anticipated executive orders in Houston on Wednesday intended to cut red tape and speed up the permitting process for energy infrastructure projects. 

The first order takes aim at oft-overlooked laws and regulations that have plagued the permitting process for energy infrastructure projects. Chief among them are Clean Water Act water quality determinations known as “401 certifications” which have become political flash points for states and opposition groups in recent years. The order will also update regulations for the export of liquified natural gas (LNG), which have not been updated to keep pace with modern, state-of-the-art LNG export facilities. 

“Section 401 has been abused by states and project opponents, turning it into a tool of obstruction,” Ross Eisenberg, NAM Vice President of Energy and Resources, said. “This Executive Order will clarify the responsibilities of federal and state governments in administering Section 401 so that the statute is applied in a fair, uniform fashion.

The second order would clarify permitting for cross-border energy infrastructure and is intended to prevent future projects like the Keystone XL Pipeline from getting caught up in years of litigation, reviews, and delays. 

Together, these two executive orders will promote badly-needed development of infrastructure to meet U.S. energy demand, create and support jobs for U.S. manufacturing workers, and provide reliable and affordable energy to U.S. consumers.

“The NAM has consistently called for measures to accelerate the permitting process for new energy infrastructure for several years, and has actively called on the Trump Administration to improve the way federal and state agencies authorize these projects,” Eisenberg said. “Manufacturers need predictable permitting laws that tell us the rules of the road and how we can meet them.”

Modernizing and investing in America’s infrastructure is a top priority for manufacturers in the United States, who rely on critical infrastructure projects to connect with employees, work with suppliers, transport goods to market and increase productivity. When infrastructure fails to meet those needs, it negatively impacts growth.

The National Association of Manufacturers (NAM) continues to rally support for broad-based, jobs-creating investment in expansion and modernization, including advocating increased public and private infrastructure funding, developing an interstate system focused on moving goods to market, investing in ports and inland waterways, supporting efforts to reduce traffic congestion and modernizing drinking water and wastewater systems as well as modernizing information and telecommunications infrastructure. Learn more about the NAM’s plan at NAM.org/BuildingToWin.

President Trump Just Held a White House Meeting About the Manufacturing Workforce Crisis…

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Job creation in the modern manufacturing industry is surging, but employers are struggling to find enough workers with the right set of skills. This workforce crisis has caused nearly half a million open manufacturing jobs to remain unfilled, and the Manufacturing Institute’s 2018 Skills Gap Study found that number is expected to swell to 2.4 million within the next decade.

Manufacturers aren’t sitting on the sidelines, and neither is the White House. 

Yesterday, President Trump, Ivanka Trump, and Secretary of Commerce Wilbur Ross sat down with business leaders, educators, and policy makers on the American Workforce Policy Advisory Board to discuss the depth of the workforce crisis, how it is negatively impacting economic growth, and pro-active solutions to up-skill America’s workforce:

Last month, the Bureau of Labor Statistics said U.S. job openings reached a record high in December at 7.3 million. The White House says the job openings present “a mismatch between the skills needed and those being taught, requiring immediate attention to help more Americans enter the workforce.”

The advisory board members will work “to develop and implement a strategy to revamp the American workforce to better meet the challenges of the 21st century,” the White House said.

NAM President and CEO Jay Timmons, as a member of the board, participated in the White House meeting, and shared a few words with President Trump about manufacturing’s historic optimism and growth, and how the workforce crisis is acutely threatening the industry. 

 

Timmons cited the results of our latest Manufacturers’ Outlook Survey, which showed optimism in the industry at historic highs for the ninth consecutive quarter: 

JAY TIMMONS: I had the great fortune yesterday of being able to announce the results of our first quarter 2019 Survey of Manufacturers with the Vice President present at our Board of Directors meeting. And as you know, that survey has been going on for 20 years. I was able to announce that we have had nine consecutive quarters of record optimism — 

PRESIDENT TRUMP: Great. 

JAY TIMMONS: — for manufacturers. 91.8 percent. And that’s no accident. That is because of the tools we’ve been given to invest, to hire, to raise wages on benefits through tax reform, through regulatory certainty. And that’s created a bit of a challenge for us because now we have 428,000 jobs open in manufacturing. Our Manufacturing Institute predicts that that number will increase to 2.4 million in the next 10 years. So this Board, this Advisory Board, it’s perfect timing. 

THE PRESIDENT:  Thank you, Jay.  And if you remember from past years, others said that manufacturing was not going to happen; those jobs were never coming back.  And they are coming back.  We have 600,000 —

MR. TIMMONS:  Well, they’re coming roaring back.

“Thank you for taking this on,” Timmons said. “It really is going to matter for America’s future. It’s going to matter for our success in the global economy.”

It will take collaboration from manufacturing leaders, policy makers, educators, and communities to tackle the workforce crisis and guarantee further growth in the modern manufacturing industry. Yesterday’s meeting was an encouraging sign that we’re headed in the right direction. 

PepsiCo Invests $159M in Indiana Manufacturing Facility, Boosting Production and Creating 50 Jobs

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(Photo Credit: Flickr | CC BY 2.0)

Manufacturers continue to invest, innovate, manufacture and distribute right here in the United States, creating new jobs and opportunities. The economy is surging, and the manufacturing industry continues to add jobs while producing more and more for the U.S. economy.

In the latest sign of this exciting growth trend, Frito-Lay, a division of PepsiCo, recently announced plans to invest $159 million in two manufacturing facilities in Frankfort, Indiana:

The Frito-Lay division of PepsiCo, Inc. has made plans to improve its manufacturing capabilities in Frankfort, Indiana. The company is investing $159 million into facility enhancements that include adding two new snack production lines and a 210,000-square-foot warehouse expansion.

Two Frito-Lay manufacturing sites currently operate in the town and run 17 production lines. More than 1,100 people work at the facilities. The new investment will allow the company to hire 50 additional employees.

Frito-Lay’s facilities in Frankfort span 650,000 square feet of manufacturing space and employ 1,100 workers.

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