American manufacturers are investing in new equipment and facilities while also putting more money into workers' paychecks, according to a survey released Wednesday by the National Association of Manufacturers (NAM).
Emerson chairman and CEO and NAM board chairman David Farr delivered the results of the new survey to the House Ways and Means Committee in testimony on Wednesday morning.
Recent Stories in Issues
Of the manufacturers surveyed, 72 percent said they're putting extra money from the tax cuts back into workers' benefits and salaries, 77 percent said they were hiring more employees, and 86 percent said they were investing in equipment and building plants.
"Manufacturing in America is now rising to new heights, thanks to tax reform, and as a result, manufacturers of all sizes are already investing more, growing more, hiring more and paying more," Farr said in a press release. "They are already improving lives and livelihoods. And, as the survey results I'm releasing today show, we manufacturers are just getting started."
NAM also pointed to a part of the survey that indicated 93 percent of those surveyed were optimistic for their companies and for the economy in general. In the 20 years in which they have been conducting the survey, NAM said the optimism response was a "near-record" high, and respondents pointed to the tax cuts as a specific reason for their answers.
While unemployment has recently sunk to 3.9 percent, wage growth has remained "tepid" in the eyes of some analysts and economists, but those summaries are looking at the broader economy, and not just manufacturing.
Also, a recent report by Bloomberg Quint noted that job turnover numbers have picked up in recent months, which could point to future gains in wages nationally.
"The rate at which workers are leaving their jobs has accelerated to cycle highs in the past six months as measured by the Jobs Openings and Labor Turnover report," the Bloomberg Quint article noted. "This indicates a strong labor market where workers are confident that if they leave their job they can easily find another. Based on its current trajectory, the quit rate may soon reach levels not seen since the series began back in the hot job market of 2000."
In his testimony before the Ways and Means Committee, Farr told the stories of four companies—in Colorado, Maine, and two in Ohio—to illustrate the reinvestment into wages, equipment, and facilities.
"This feeling of optimism ripples up and down the supply chain," Farr told the committee. "The combination of lower rates, incentives to upgrade capital equipment and the move toward a territorial system has primed small and large companies for growth, and it has started. Emerson's year-to-date USA sales are up more than 8 percent in our fiscal 2018."
Economists are waiting to see if wage growth can accelerate so as to compete with inflation, which has also been growing recently.