Political uncertainty, exploding federal regulations and the looming economic hit of Obamacare are leading most manufacturers to freeze hiring--or fire workers, according to a new survey.
The National Association of Manufacturers and Industry Week survey revealed Monday that 52.6 percent of the nation's industry plan no new hires, and another 15.7 percent are planning to fire up to 10 percent of their staff.
The new survey casts a pall over last week's employment report that showed some jobs growth and a tick down in the unemployment rate to 7.7 percent.
Economic skittishness is the primary reason manufacturers still have new hires on hold. Some 74 percent said in the survey that the uncertainty over how much Obamacare will cost them in additional healthcare costs is their top worry. Political uncertainty in Washington, which has recently lurched from the "fiscal cliff" debate to the sequester, is another big worry.
"During the election last year, all eyes were on manufacturing, and now we have entered a pivotal year for manufacturers as they try to grow and create jobs to lead our economy," said NAM Chief Economist Chad Moutray. "This quarter's survey shows manufacturers need action to address their concerns over rising healthcare costs, the political climate and taxes and regulation. It is difficult for manufacturers to gain the certainty needed to hire when Washington continues to move from one crisis to the next with no real solutions to our long-term fiscal problems."
Below are the two key questions from the survey addressing employment plans and Obamacare.
Employment: Over the next year, what do you expect in terms of full-time employment in your company?
Increase more than 10 percent--2.2%
Increase 5 to 10 percent--6.8%
Increase up to 5 percent--22.7%
Stay about the same--52.6%
Decrease up to 5 percent--12.1%
Decrease 5 to 10 percent--2.5%
Decrease more than 10 percent--1.1%
Obamacare: What are the biggest challenges you are facing right now?
(Respondents could check more than one response, therefore, total responses will exceed 100 percent.)
Attracting and retaining a quality workforce--41.1%
Challenges with access to capital or other forms of financing--4.7%
Rising energy and raw material costs for our products--37.3%
Rising health care/insurance costs--74.0%
Uncertainties related to the political climate (e.g., fiscal abyss, pending budget cuts)--72.1%
Unfavorable business climate (e.g., taxes, regulation)--67.7%
Weaker domestic economy, sales of our products--49.9%
Weaker global growth, slower export sales--27.9%