Examining the policies that limit growth in U.S. manufacturing

August 28, 2012

Removing some of the roadblocks that stand in the way of U.S. manufacturing growth is something that has been championed by many pundits and industry experts, as despite the revitalization of the American industry there is still room for expansion.

According to Industry Market Trends, manufacturing has been a bright spot in an otherwise cloudy U.S. economy over the past three years, but the growth in the sector has remained constrained because of numerous factors ranging from excessive taxation to overregulation.

Regulations stifle growth in many industries across the U.S., and a recent report from manufacturing executives and experts highlighted one of the major concerns for companies that produce goods in the country.

"In an industry where time is money, burdensome regulations are costing too much of both," the report said, according to the news outlet.

The Wall Street Journal reported that many companies that manufacture products in the U.S. have also begun to voice complaints about the country's tax code – something that desperately needs an overhaul according to many economists and executives.

"It all sort of starts and stops right there," with corporate tax rates, Keith Wandell, chief executive of the Milwaukee, Wisconsin-based Harley Davidson Inc., told the Journal. "We need to be more competitive [with other nations] in that respect."

While manufacturing has gone through a resurgence in the U.S. over the past several years. Due to an adjustment in business strategy and an adoption of lean methods, many have noted companies may begin to look elsewhere if politicians do not address taxation.

"The current corporate tax structure is driving manufacturing outside the country," David Simchi-Levi, an engineering professor at MIT, told the news outlet.

Infrastructure improvements could help to silence some of the critics of the current tax structure, as it would show that tax money is going to help businesses in some way rather than impeding the growth of these companies.

"Roughly since about 1970, the U.S. has dramatically underfunded infrastructure," Jim Dugan, a spokesman for Caterpillar, told the Journalp. "We now use Canadian ports to import some parts for our U.S. factories because U.S. ports are so backed up and outdated."