AEM CEO Survey Finds Strong Support for U.S. Innovation and Competition Legislation
July 25, 2022 (Washington, D.C.)- A new survey of 100 CEOs of equipment manufacturing companies released today by the Association of Equipment Manufacturers (AEM) shows that equipment manufacturers in the United States face lost sales, lagging production times, and critical labor shortages, and that CEOs view measures to enhance U.S. innovation leadership and global competitiveness as necessary for economic growth.
AEM surveyed CEOs on the state of American manufacturing, the role of the Chinese market, and industry priorities for the global innovation and competition bill under consideration by Congress. The findings of the survey show that equipment manufacturers continue to be impacted by long raw-materials lead times, persistent shortages of critical basic materials, and difficulties in transporting products.
“It should come as no surprise to anyone who has been paying attention to the U.S. manufacturing sector during the past two years that we need to fund investments for domestic semiconductor research, design, and manufacturing, deliver tariff relief to manufacturers, strengthen critical supply chains, and invest in the next generation of skilled workers,” said Kip Eideberg, AEM’s senior vice president of government and industry relations.
“While we welcome efforts to incentivize semiconductor production in the United States, it is imperative that Congress continues to work on bipartisan measures that will strengthen domestic supply chains, bolster emerging technologies, and invest in the American worker. As our latest CEO survey indicates, there is also a clear and urgent need to address and reorient U.S. policy in the Indo-Pacific. We will continue to remind lawmakers that their job is not done until the United States is once again the most innovative and productive nation in the world.”
AEM conducted the survey from June 27 to July 15. CEOs were asked to weigh in on the current state of the U.S. manufacturing sector, the impact of supply chain challenges, the impact of a lack of skilled workers on manufacturing operations, and the implications the semiconductor shortages on revenue and production times.
The survey’s key findings include:
- More than eight-in-ten (84 percent) of CEOs believe China’s unfair trade and investment practices prevent American companies from competing on a level playing field.
- It is worth noting that four-in-ten (39 percent) CEOs said the Chinese government and its trade practices, including intellectual property theft, forced technology transfer, and unfair subsidies pose enormous, long-term challenges for their companies and should be countered through robust economic and geopolitical response by the United States.
- Three out of four CEOs believe federal investment in semiconductor research and development is necessary for economic growth and will allow American companies to be more competitive in the global marketplace.
- More than eight-in-ten (81 percent) of CEOs want the U.S. to codify a Section 301 tariff exemption process.
- Seven-in-ten (72 percent) CEOs had to increase prices on finished goods due to ongoing Section 301 tariffs.
- Six-in-ten CEOs report lost sales opportunities and delayed production due to chip shortages.
- More than three quarters (76 percent) of CEOs see value in establishing an Office of Manufacturing Security and Resilience, where manufacturers of all sizes can connect with the federal government to identify supply chain disruptions before they become full-blown crises.
- Almost nine-in-ten (87 percent) of CEOs agree that increasing domestic production of components and semiconductors will decrease wait times and supply chain constraints.
- More than three quarters (79 percent) of CEOs had to raise prices on finished goods due to chip shortages.
- Almost eight-in-ten (78 percent) of companies cite skilled labor shortages delaying production.
- Seven-in-ten CEOs said they would create more jobs as a result of increased domestic semiconductor production.
- Nine-in-ten (91 percent) of CEOs would like to see federal investment in workforce training and technical apprenticeships.
AEM is the North American-based international trade group representing off-road equipment manufacturers and suppliers, with more than 1,000 companies and more than 200 product lines in the agriculture and construction-related industry sectors worldwide. The equipment manufacturing industry supports 2.8 million jobs in the U.S. Equipment manufacturers also contribute $288 billion a year to the U.S. economy. Visit aem.org/advocacy for more information.