Health care, regulatory costs top growth barriers to U.S. manufacturing

A national manufacturing trade organization has cited rising health care costs and regulatory compliance as the top two barriers to growth U.S. manufacturers are facing.

The National Association of Manufacturers (NAM) identified the areas as part of its third quarter 2016 Manufacturers’ Outlook Survey.

“Manufacturers continue to grapple not just with global economic challenges, but also with policy headwinds coming from Washington,” said NAM Chief Economist Chad Moutray. “Regulatory barriers, rising health care costs, a broken tax code and a lack of movement on free trade agreements like the Trans-Pacific Partnership haven’t helped either. Policymakers in Washington can’t fix every problem, but they can certainly take action to give manufacturing — and the larger economy — a boost.”

Key survey data points include:
• Projected growth depends on firm size. Smaller firms anticipated sales growth of 1.3% while medium and larger firms averaged 2.1% growth expectations.

• Manufacturers project 2016 interest rate increase. More than 58% of survey respondents felt the Federal Reserve would increase rates this year, but very few believed this increase would happen before December.

• Manufacturers agree government regulations have a disproportionate impact on small businesses. Of those surveyed, 88.8% either somewhat or strongly disagreed with the notion that the federal government considers the point of view of small business owners when it imposes new regulations.