Optimism from businesses in the manufacturing sector may have fallen quite a bit since early in 2011, but third-quarter levels are still well above levels considered neutral, according to a yet-to-be released study conducted in part by the National Association of Manufacturers (NAM).
NAM Chief Economist Chad Moutray noted during a speech at the National Economists Club in Washington, DC that its study on manufacturing business optimism, to be released early next week, finds the percentage of manufactureing business with a positive future outlook at 65.4%. While well below the 86.4% posted in the second quarter and the 72.6% for calendar year 2010, it remains significantly above the 50% threshold, which is seen as good news. In 2008 and 2009, it was well below 50%.
“While there was clearly a fall, you still have a tremendous level of optimism,” said Moutray. He added that the two biggest impediments to increased optimism, according to manufacturers, was the weaker economy during the quarter and what is seen as an ongoing unfavorable business and regulatory climate. More than 60% of respondents noted both among their top issues. Perhaps the latter will get a bump from President Barack Obama’s Jobs Act, unveiled in the hours following Moutray’s speech, and a possible passage of three U.S. trade agreements (with Columbia, Panama and South Korea).
Moutray, who strongly believes three languishing Bush-era trade agreement finally will pass this year, told NACM that two areas businesses are hoping to hear more from policy-makers on in the coming months would be changes to the tax code and a more permanent extension of the research and development tax incentives set to expire later this year.
Brian Shappell, NACM staff writer