Trump policies spark manufacturing renaissance in 2017

Trump policies spark manufacturing renaissance in 2017
January 04 14:14 2018 Print This Article

The December manufacturing survey released by the Institute for Supply Management (ISM) revealed that 2017 was the strongest year for American manufacturing since 2004. The survey showed growth in 16 of 18 manufacturing sectors, led by machinery, computers and electronic products. It also showed strong increases in supplier deliveries and the price of industrial goods along with a sharp decline in factory inventories, a sign that manufacturers will boost their supply orders.

President Donald Trump made American manufacturing a key factor in his economic plan. His Commerce Department, led by Secretary Wilbur Ross has negotiated with trading partners to increase American exports. The Trump Administration has also significantly reduced federal regulations, making manufacturing more profitable.

Another promising report was released by payroll processing company ADP, which estimates that 250,000 new jobs were created in December, including 25,000 manufacturing and construction jobs. Business and professional services showed the strongest, adding 72,000 jobs in December. The news led to a strong performance in the stock markets, with the Dow Jones Industrial Index topping 25,000 for the first time.

There is reason for continued optimism for manufacturing growth in 2018 with the passage of the Tax Cuts and Jobs Act right before Christmas. The corporate income tax rate was lowered from 35% (highest in the industrialized world) to 21%, effective on January 1. The legislation also lowers the taxes levied on overseas profits and equipment repatriated to the United States. A 2015 study commissioned by the National Association of Manufacturing estimated that such tax changes would generate 6.5 million new jobs and $12 Trillion in economic activity over a decade.