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Economic Trends

What Do Americans Think about Manufacturing—and Its Future?

 

From NAM Input, The National Association of Manufacturers

Do Americans think manufacturing is important? How do they view the technological changes transforming the industry along with the rest of the economy?

Two recent surveys shed light on these important questions. First, a survey conducted by the Brookings Institution asked Americans what they think about manufacturing’s present state. More from the survey summary:

  • “Fifty-eight percent believe manufacturing is very important to the American economy, 14 percent think it is somewhat important, 6 percent feel it is not very important, and 22 percent are unsure.”

However, opinion varied markedly by age group, with younger people seeing manufacturing as less important:

  • “Seventy-one percent of people over the age of 55 believe manufacturing is very important, whereas only 45 percent of those aged 18 to 34 years feel that way. That is a 26 percentage point difference in feelings about the subject between these age groups.”

Now, what about manufacturing’s future? Another survey, by Gallup and Northwestern University, asked Americans, Canadians and Brits whether they thought their countries were prepared for technological change in the “AI age.” From Bloomberg’s writeup:

  • “Just 1 in 4 Americans are confident that the higher education system is doing enough to address the need for career-long learning and retraining.”
  • “Tuition costs are the biggest deterrent, followed by academic programs that aren’t keeping up with an evolving workplace environment, according to the survey.”

These findings underline the importance of The Manufacturing Institute’s mission and the new Creators Wanted Fund that will support significant programming in 2020 to improve industry perceptions as well as expand the Institute’s efforts.

First, too many young people have the wrong image of manufacturing. Many still envision the same sort of factories their grandfathers worked in, instead of the high-tech, stimulating environment it is today. Brookings’ results suggest that manufacturers must do better at showing young people how manufacturing is leading the 21st-century economy—a key mission of the Institute.

Meanwhile, Americans are right to worry that our educational system isn’t prepared for technological change, which will create opportunities as much as disruptions. That’s why the Institute is fundraising for its new $10 million Creators Wanted Fund, which will enable it to increase participation in apprenticeships and other educational programs by 25 percent through 2025. Learn more about the fund and related programming by contacting NAM Vice President of Brand Strategy Chrys Kefalas.

 

The Council of Industry has its own solution, the NYS Registered Apprentice Program is available to individuals with tactical skills and math aptitude. This apprenticeship has two basic elements. The first, On-the-Job Training (OJT), consists of a journey-level, craft person capable and willing to share their experience with an apprentice, in a hands-on manner. The second, Related Instruction (RI), consists of learning more theoretical or knowledge-based aspects of a craft. Applicants must be 18 years or older, eligible to work in the United States and possess a superior work ethic. To be a registered apprentice, an individual must be employed by a participating employer. The apprentice is required to complete a minimum of 18 months up to 4 years of on-the-job training (depending on the position) and 144 hours or required related instruction per year. For more information visit our website or contact Johnnieanne Hansen at jhansen@councilofindustry.org or call (845) 565 – 1355.

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February 2019 Empire State Manufacturing Survey

 

 

The results for the February 2019 Empire State Manufacturing Survey are in, and they’re more positive than January. The general business conditions index increased after falling eight points in January to its lowest point in well over a year.

Business activity grew modestly in New York State, according to firms responding to the February 2019 Empire State Manufacturing Survey. The headline general business conditions index moved up five points to 8.8. New orders and shipments also increased modestly. Delivery times were slightly longer, and inventories held steady. Labor market indicators pointed to a slight increase in employment and hours worked. The prices paid index moved lower for a third consecutive month, indicating an ongoing deceleration in input price increases, while the prices received index climbed ten points to reach its highest level in several months, indicating a pickup in selling price increases.

The Empire State Manufacturing Survey also asks manufacturers to provide a six-month outlook, which improved significantly from January. Firms are fairly optimistic about future conditions after slumping last month.

Read the full report for a more detailed look at the results. 

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Manufacturing Alliance to Focus on Workforce and Taxes this Legislative Session

 

The New York State Manufacturing Alliance, of which the Council of Industry is a founding partner, is focusing on two issues of vital importance to manufacturing businesses across the Hudson Valley and the State – Workforce Development and Taxes.

On the Workforce development front, we are advocating for continued support of the P-TECH program, Career and Technical Education programs, and community colleges. Of particular importance to the Alliance is the expansion of the hugely successful Manufacturers Intermediary Apprenticeship Program (MIAP).

Manufacturers Intermediary Apprenticeship Program

In 2016, New York State provided funding for MIAP program in Central New York.  This program was met with great interest by both manufacturers and their employees.  Since 2016, this program has grown from Central New York where there are over 30 companies formally participating in Registered Apprenticeship and 115 apprentices in seven unique occupations plus another 50 anticipated in 2019.

In 2017, the program rolled out to the Hudson Valley (Council of Industry) and the Rochester Region (through Rochester Tooling & Machine Association).  In these 2 regions there are now more than, 75 apprentices at 30 companies, in 10 different trades.

Manufacturers in the Western Southern Tier are now also beginning to participate in the program, and in the Albany region manufacturers are working with the Center for Economic Growth (CEG).  This momentum has motivated the New York City and Long Island areas to also request help in establishing themselves as intermediaries, proving the model is not only effective but expanding, therefore positively impacting the sector and our state’s business and workforce development as a whole.   In fact, we recently enrolled the first company on Long Island, Estee Lauder.

This model with its use of trusted associations as “intermediaries” and its collaborative partnering is a unique model of apprenticeship and is working for small and mid-sized manufacturers.  In traditional training programs, students are trained and seek employment when they are done – in an apprenticeship, a job comes first and training is supplied by an employer.  Industry participants see an increase in productivity, reduced turnover, and increased employee retention. Ultimately, we see it as a technique for improved recruitment and candidate selection. As employers struggle to fill open positions, apprenticeships are an important tool in addressing workforce development needs. MIAP helps manufacturers build effective apprentice programs.

 Given the tremendous success to date, we feel MIAP is a critical tool for continuing to build a skilled workforce throughout New York State.  This program is an essential component of a workforce development strategy to grow a stronger New York State economy through advanced manufacturing.

We are seeking $1.25 million to expand the program across the state.

A 0% Income Tax Rate for All New York Manufactures

The Manufacturers Alliance has also put forward and is seeking support for a 0% income tax rate for all manufacturers to be included in the 2019-2020 State Budget.

In 2014, we were successful in getting included in the final State Budget a reduction in the tax rate for manufacturers incorporated as C-corps.  This single action propelled New York from the bottom ten to the top 10 states for manufacturing and sent a message to large manufacturers, that New York was the place to invest.  It was a proven and effective tool to retain and grow manufacturing jobs across New York State.

However, the vast majority of manufacturers in the Hudson Valley and across New York State are small to medium-sized manufacturers organized as S corps, proprietorships, LLCs and partnerships (pass-through entities).  These small to medium size manufacturers do not currently benefit from the existing zero percent rate and actually pay the 2nd highest income tax rate in the United States.   They are constantly being enticed by other states with friendlier tax climates to move operations and invest there.  These manufacturers are looking to their home state, New York, to demonstrate that they should stay in New York and continue to grow and invest here.

In response to the pleas from our small to medium-size manufacturers, the Manufacturing Research Institute of New York State, commissioned a study to analyze the impact of extending the zero percent corporate franchise tax rate to these small and medium manufacturers.  According to a study by the Beacon Institute in September 2018, “the elimination of the PIT for pass-through manufacturers would increase private sector jobs by 4,660 in the first full-year and by 5,850 in 2023.   It would cause investment to rise by $118 million in 2019 and by $147 million in 2023. The increase in employment and investment would boost real disposable income by $345 million in 2019 and $503 million in 2022”.

Extending a 0% tax rate to small and medium-sized manufacturers would send a strong signal to manufacturers that New York State is not only open for business but making a solid investment in their economic future.

We are working hard, meeting with legislators and administration officials, to get this change included in the 2019-20 State Budget.

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2019’s First Empire State Manufacturing Survey

 

January’s Empire State Manufacturing Survey results are showing slight growth, which is a promising start to 2019! Similar to last month though, growth is increasing at a much slower pace than previously.

Business activity grew slightly in New York State, according to firms responding to the January 2019 Empire State Manufacturing Survey. The headline general business conditions index fell eight points to 3.9, its lowest level in well over a year. New orders increased at a slower pace than in recent months, while shipments continued to climb significantly. Delivery times were slightly shorter, and inventories declined. Labor market indicators pointed to a modest increase in employment and hours worked. The prices paid index moved lower for a second consecutive month, indicating some slowing in input price increases, and the prices received index held steady.

We ended 2018 on a high note and responding manufacturers are still remaining fairly optimistic about the six-month outlook.

Read the full report for a more detailed look at the results.

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2018’s Final Empire State Manufacturing Survey

Federal Reserve

 

The results from the last Empire State Manufacturing Survey of 2018 are in! New York Manufacturers are remaining optimistic about 2019 but they are slightly more tempered than in November.

Business activity grew at a slower pace than in recent months in New York State, according to firms responding to the December 2018 Empire State Manufacturing Survey. The headline general business conditions index fell twelve points to 10.9. New orders increased modestly, while shipments continued to climb significantly. Delivery times lengthened slightly, and inventories moved higher. The employment index rose twelve points to 26.1, indicating that employment grew strongly, and hours worked increased modestly. The prices paid index, while still elevated, moved down five points, and the prices received index held steady. Looking ahead, firms remained fairly optimistic about the six-month outlook.

Each January the survey goes through revisions to prepare for the upcoming year. All data undergoes a benchmark revision in December to reflect new seasonal factors. The diffusion indexes are each tested for seasonality and adjusted accordingly if patterns are found.

2019 will most definitely be an interesting year for the manufacturing industry. The exponential growth in technology and innovation will undoubtably have an impact on the industry. We look forward to finding out what’s in store.

Read the full report for a more detailed look at the results.

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Empire State Manufacturing Survey: Another Consistent Month

 

Each month the Council of Industry writes a blog post discussing the results of the Empire State Manufacturing Survey, and since the start of 2018 each post has reported consistent growth for the industry. This month is no exception to that trend. Business activity grew strongly this month and the headline general business conditions index rose two points to 21.1, which suggests faster growth than in September. New orders and shipments also spiked considerably. Additionally, this month saw a slight increase in employment levels; a positive sign for many manufacturing companies that are struggling to find skilled workers to fill their open positions. Employment is expected to increase in the months to come as well. Predictions for the future also remain positive. New York State’s manufacturers are anticipating continued growth throughout the next six months.  Look for our post next month with the results of the November survey to see if this upward trend continues!

Read the full report for a more detailed look at the results.

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New York Manufacturers Report Solid Growth

Federal Reserve

 

The results for the September 2018 Empire State Manufacturing Survey are in, and once again firms are reporting solid growth. The industry has remained relatively steady throughout recent years, and firms are remaining optimistic about their six-month outlook. The survey indicates that new orders and shipments are up, and the labor market pointed to an increase in employment levels.

The headline general business conditions index showed ongoing strength, but moved down seven points to 19.0, pointing to a slower pace of growth than last month. New orders and shipments grew moderately. Delivery times continued to lengthen, and inventories moved higher. Labor market indicators pointed to an increase in employment levels and longer workweeks. Price indexes were little changed and remained elevated, suggesting ongoing significant increases in both input prices and selling prices. Looking ahead, firms remained fairly optimistic about the six-month outlook.

Read the full report for a more detailed look at the results.

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