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Released March 11, 2024 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--U.S. manufacturers raised their capital-spending expectations over the next 12 months, based on the latest outlook survey by the National Association of Manufacturers (NAM), although respondents said federal regulatory and tax policies could very well hinder that growth.
The NAM survey ran from February 9 to February 23 and received 300 responses, featuring small (those with 49 or less employees), medium-sized (between 50 and 499 employees) and large manufacturers (500 or more employees).
According to the survey results, released March 5, respondents to the survey anticipate an increase of 1.4% in capital spending over the next 12 months--a four-quarter high--up from 0.6% in fourth-quarter 2023 and 1.2% in the third quarter; 42.3% expect additional capital spending in the next year, with 38.3% predicting no change and 19.5% expecting reduced capital expenditures.
But respondents said the Biden administration's current regulatory and tax policies are affecting capital investment and could continue to do so. According to the summary of findings, "the expiration of federal tax incentives related to R&D, interest deductibility and expensing for capital investments has already caused nearly 40% of respondents to pull back on hiring and investing due to increased taxes." The NAM expects that number will rise if the tax incentives are not reinstated "soon."
And last month, the U.S. Securities and Exchange Commission (SEC) finalized a new air-quality rule setting greenhouse gas reporting rules, which NAM Chief Executive Officer Jay Timmons said in a March 6 press release, "will impose new burdens on publicly traded companies, at a time when manufacturers already face regulatory costs exceeding $350 billion every year, and it will take considerable time for manufacturers to understand the new reporting requirements and fully come into compliance."
The latest results also show that two-thirds (65.5%) of manufacturers said that rules coming from the Biden administration will be costly to implement. Amid the regulatory onslaught, concern about the overall business climate was not far from levels last seen at the end of 2016.
Nearly 94% of respondents said it is "important" for the federal tax code to help reduce manufacturers' costs for performing R&D, accessing capital through business loans and investing in capital equipment purchases; 58% said it is "very important."
In a statement prior to President Biden's State of the Union Address, Timmons said, "Manufacturers' concerns in this survey should provide a stark warning to both parties ... If you want to continue America's manufacturing resurgence, focus on constructive policies to strengthen our industry--reinstating key tax provisions, achieving immigration solutions and advancing permitting reform."
"But if President Biden wants to put his manufacturing legacy at risk, nothing will do that faster than raising taxes on manufacturers or continuing this regulatory onslaught."
Despite any negative sentiment, Industrial Info's North American Industrial Project Spending Index for the U.S. Industrial Manufacturing Industry shows project spending in January (the latest data available) was $257.9 billion--up from $124.8 billion in November 2023 and $128.8 billion in December--and a 11.5% increase year-over-year.
Industrial Info is tracking $51 billion worth of capital Industrial Manufacturing Industry projects in the U.S. planned to kick off in the second quarter. By sector, data center projects account for roughly 36% of the activity, with more than $18 billion in investment, followed by the automotive sector ($9.5 billion).
Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for a full list of project reports.
The data center projects include e-commerce giant Amazon.com Incorporated's (NASDAQ:AMZN) (Seattle, Washington) Phase III addition at its data center campus in Plain City, Ohio. The $180 million project entails adding a third, 215,060-square-foot building designed to provide expanded cloud services in the region. The project is expected to kick off in May and wrap up in mid-2026. Subscribers can click here for the project report.
Also planned to kick off is construction of Novva Data Centers' (West Jordan, Utah) $550 million grassroot data center in McCarran, Nevada, outside of Reno. The 300,000-square-foot data center facility will feature six 10-megawatt (MW) data halls, to provide colocation services to major cities in the western U.S. Click here for the project report.
Industrial Info is tracking three major project kickoffs in the second quarter for the development of electric vehicles (EVs) and related battery systems, but manufacturers involved in producing EVs and related components also are planning smaller upgrades and expansions to existing plants. Automaker Stellantis NV (NYSE:STLA) (Hoofddorp, Netherlands) is spending $51 billion to upgrade its ITP 1 transmission plant in Kokomo, Indiana. The project entails upgrading equipment and supporting systems to perform gear machining and final assembly of electric drive modules that will help power future EVs assembled in North America. Stellantis expects production will start in the third quarter. Click here to read more information.
Gestamp (Madrid, Spain) plans to begin upgrading its automotive stamping manufacturing plant in South Charleston, West Virginia, owned by its Gestamp North America (Troy, Michigan) subsidiary. The $70 million project entails upgrading equipment, including stamping presses, and introducing robotic laser equipment and welding equipment, to meet customer needs for EVs. The completion is expected by the end of 2025. According to local news media, the project has received a $7.5 million incentive from the government of West Virginia and is expected to create 100 new jobs. Click here for the project report.
Subscribers to Industrial Info's GMI Project and Plant databases can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The NAM survey ran from February 9 to February 23 and received 300 responses, featuring small (those with 49 or less employees), medium-sized (between 50 and 499 employees) and large manufacturers (500 or more employees).
According to the survey results, released March 5, respondents to the survey anticipate an increase of 1.4% in capital spending over the next 12 months--a four-quarter high--up from 0.6% in fourth-quarter 2023 and 1.2% in the third quarter; 42.3% expect additional capital spending in the next year, with 38.3% predicting no change and 19.5% expecting reduced capital expenditures.
But respondents said the Biden administration's current regulatory and tax policies are affecting capital investment and could continue to do so. According to the summary of findings, "the expiration of federal tax incentives related to R&D, interest deductibility and expensing for capital investments has already caused nearly 40% of respondents to pull back on hiring and investing due to increased taxes." The NAM expects that number will rise if the tax incentives are not reinstated "soon."
And last month, the U.S. Securities and Exchange Commission (SEC) finalized a new air-quality rule setting greenhouse gas reporting rules, which NAM Chief Executive Officer Jay Timmons said in a March 6 press release, "will impose new burdens on publicly traded companies, at a time when manufacturers already face regulatory costs exceeding $350 billion every year, and it will take considerable time for manufacturers to understand the new reporting requirements and fully come into compliance."
The latest results also show that two-thirds (65.5%) of manufacturers said that rules coming from the Biden administration will be costly to implement. Amid the regulatory onslaught, concern about the overall business climate was not far from levels last seen at the end of 2016.
Nearly 94% of respondents said it is "important" for the federal tax code to help reduce manufacturers' costs for performing R&D, accessing capital through business loans and investing in capital equipment purchases; 58% said it is "very important."
In a statement prior to President Biden's State of the Union Address, Timmons said, "Manufacturers' concerns in this survey should provide a stark warning to both parties ... If you want to continue America's manufacturing resurgence, focus on constructive policies to strengthen our industry--reinstating key tax provisions, achieving immigration solutions and advancing permitting reform."
"But if President Biden wants to put his manufacturing legacy at risk, nothing will do that faster than raising taxes on manufacturers or continuing this regulatory onslaught."
Despite any negative sentiment, Industrial Info's North American Industrial Project Spending Index for the U.S. Industrial Manufacturing Industry shows project spending in January (the latest data available) was $257.9 billion--up from $124.8 billion in November 2023 and $128.8 billion in December--and a 11.5% increase year-over-year.
Industrial Info is tracking $51 billion worth of capital Industrial Manufacturing Industry projects in the U.S. planned to kick off in the second quarter. By sector, data center projects account for roughly 36% of the activity, with more than $18 billion in investment, followed by the automotive sector ($9.5 billion).
Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for a full list of project reports.
The data center projects include e-commerce giant Amazon.com Incorporated's (NASDAQ:AMZN) (Seattle, Washington) Phase III addition at its data center campus in Plain City, Ohio. The $180 million project entails adding a third, 215,060-square-foot building designed to provide expanded cloud services in the region. The project is expected to kick off in May and wrap up in mid-2026. Subscribers can click here for the project report.
Also planned to kick off is construction of Novva Data Centers' (West Jordan, Utah) $550 million grassroot data center in McCarran, Nevada, outside of Reno. The 300,000-square-foot data center facility will feature six 10-megawatt (MW) data halls, to provide colocation services to major cities in the western U.S. Click here for the project report.
Industrial Info is tracking three major project kickoffs in the second quarter for the development of electric vehicles (EVs) and related battery systems, but manufacturers involved in producing EVs and related components also are planning smaller upgrades and expansions to existing plants. Automaker Stellantis NV (NYSE:STLA) (Hoofddorp, Netherlands) is spending $51 billion to upgrade its ITP 1 transmission plant in Kokomo, Indiana. The project entails upgrading equipment and supporting systems to perform gear machining and final assembly of electric drive modules that will help power future EVs assembled in North America. Stellantis expects production will start in the third quarter. Click here to read more information.
Gestamp (Madrid, Spain) plans to begin upgrading its automotive stamping manufacturing plant in South Charleston, West Virginia, owned by its Gestamp North America (Troy, Michigan) subsidiary. The $70 million project entails upgrading equipment, including stamping presses, and introducing robotic laser equipment and welding equipment, to meet customer needs for EVs. The completion is expected by the end of 2025. According to local news media, the project has received a $7.5 million incentive from the government of West Virginia and is expected to create 100 new jobs. Click here for the project report.
Subscribers to Industrial Info's GMI Project and Plant databases can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
