Column: Optimism high as National Association of Manufacturers gathers in Phoenix

Spirits were high last week as manufacturing executives gathered in Scottsdale for the National Association of Manufacturers Spring Board of Directors meeting. The largest manufacturing association in the United States, NAM represents small and large manufacturers in every industrial sector and in all 50 states. The Arizona Manufacturers Council (AMC) is the official state affiliate of NAM. 

The guest list included a star-studded collection of world leaders, celebrity speakers and top executives from iconic American manufacturing companies like PING, Ball Corp., Anheuser-Busch and others. 

Vice President Mike Pence, Arizona Governor Doug Ducey, former U.S. Ambassador to the U.N. Nikki Haley, SBA Administrator and WWE co-founder Linda McMahon, and economist and author of “Trumponomics,” Stephen Moore, were among the featured speakers.  

OPTIMISM HIGH

Consistent themes throughout the event emerged around the positive economic effects of NAM-driven policies like federal tax cuts and regulatory reform. The need for certainty on trade – particularly the need to develop an innovative, enforceable agreement with China and a strong sense of urgency around the passage of the USMCA – also remained at the forefront. The AMC and the Arizona Chamber of Commerce and Industry remain committed to leading advocacy efforts at the state level.

“Manufacturing in the United States is on the rise, and manufacturers are confident about the future,” said NAM President and CEO Jay Timmons at the three-day event at the Phoenician. Timmons is widely regarded as one of the most influential leaders in Washington today.

During the first quarter of 2019, an average of 91 percent of manufacturers reported an optimistic outlook about their own company and the economy according to the NAM Manufacturers’ Outlook Survey released March 5th.  There were 12,834,000 manufacturing workers in February, with almost 1.4 million employees added since the end of the Great Recession – the most workers in the sector since December 2008. 

While momentum is building, manufacturers expressed common concerns around trade, infrastructure deficiencies and workforce shortages. 

USMCA, TRADE FIGURES PROMINENTLY

During his remarks, Vice President Pence urged manufacturers to “send a strong message to members of Congress in all 50 states that it’s time to approve the USMCA, and we must see it approved by Congress this year. “ 

Arizona’s international trade relationships remain vital to our state’s economy, especially with our strongest trading partners, Mexico and Canada. In 2017, Arizona exported $7.5 billion in goods to Mexico and $2.2 billion in goods to Canada. Trade with Mexico and Canada supported over 236,000 jobs in Arizona during the same year. 

The AMC and the Arizona Chamber are working full tilt with the Arizona delegation to create a sense of urgency around the passage of the USMCA. The deadline for the U.S. International Trade Commission (ITC) to release an assessment on the agreement and its economic impact is expected in April of this year and Congress will begin consideration of the agreement following the release of the ITC’s assessment. 

“Ratification of the USMCA is the single most important issue facing Arizona. More than 236,000 Arizona jobs depend on our trade relationship with Mexico and Canada,” Arizona Chamber of Commerce and Industry President and CEO Glenn Hamer said. 

WORKFORCE DEVELOPMENT CRITICAL

On the workforce side, the tightest labor market on record is welcome news to employees and job seekers. However, a red-hot job market often spells challenges for employers. 

Recent studies show nearly 3.5 million manufacturing jobs will be created in the next decade. But 2.4 million of those jobs could go unfilled. The inability to attract and retain employees remained the top concern for the fifth consecutive quarter in the NAM’s Manufacturers’ Outlook Survey. One in four respondents indicated that worker shortages had forced them to turn down new business opportunities.

Dawn Grove, Chairwoman of the AMC and Chairwoman of the Workforce Arizona Council added, “Manufacturers are growing so rapidly, they are necessarily reaching out to new populations — hiring returning citizens, those with disabilities and many who have been out of the workforce for years. Modern manufacturers are implementing advanced technologies, automation and robotics to improve quality, bolster safety and better compete globally, such that American manufacturing workers are becoming better skilled, more productive and receiving higher wages than ever before.”

In Arizona, efforts are underway to create a pipeline of manufacturing workers through the power of Career and Technical Education (CTE). CTE programs are being developed that give students the hands-on skills needed to enter and succeed in the workforce. 

The AMC and the Arizona Chamber strongly support Governor Ducey’s fiscal year 2020 budget plan, which includes a $10 million investment to expand CTE offerings across Arizona. Through a grant program, high schools with CTE programs will receive up to $1,000 for each student who graduates with a certification in specific industries.

During a special edition of Ham(m)er Time filmed at PING in Phoenix, Hamer and Timmons sat down to discuss current workforce challenges and how technological advancements will continue to fuel demand for skilled workers.

NAM concluded a two-week State of Manufacturing tour in Phoenix last week, with additional stops at Intel in Chandler and Four Peaks Brewery in Tempe.

Allison Gilbreath is the Executive Director of the Arizona Manufacturers Council.