By Alice Seeley
According to the National Association of Manufacturers’ Q2 2022 Outlook survey, published on June 15, 59.3% of manufacturing leaders believe inflationary pressures will cause a recession in the next twelve months.
The association conducted the survey from May 17 through 31 before the May inflation report was released. Three-quarters of manufacturers reported that inflationary pressures were worse today than six months ago, with 53.7% saying the higher prices make it harder to compete and remain profitable. Ninety percent of respondents said increased raw material costs are their primary business challenge.
According to the survey, the top sources of inflation are increased raw material prices, freight and transportation costs, salaries, energy costs, and lack of employees.
A majority of manufacturers are not optimistic that the Federal Reserve can prevent a recession, with 52.2% of respondents saying they do not believe that the Federal Reserve will be able to avert a recession in 2022 or 2023. Meanwhile, only 11.6% believe that the Federal Reserve will be successful. The other 36.3% said they are uncertain if the Federal Reserve can stop a recession.
“Through multiple crises, manufacturers have proven remarkably resilient, but there’s no mistaking there are darker clouds on the horizon,” Jay Timmons, president and CEO of the National Association of Manufacturers and chairman of the board of The Manufacturing Institute, stated.
Timmons added, “Russia’s war on Ukraine has undeniably exacerbated higher energy and food costs.”
The National Association of Manufacturers asked lawmakers to withhold new taxes, focus on easing supply pressures, and pass the Bipartisan Innovation Act championed by the White House.
“Though it won’t solve every issue, this will give us many of the tools needed to ramp up domestic manufacturing and strengthen our supply chains,” Timmons said. “Congress needs to move swiftly to get it to President Biden’s desk.”
