It seems that the long-awaited rebirth of American manufacturing is on the verge of becoming a reality. Recent news of potential increases in jobs due to the adopted tax breaks for US manufacturing companies coupled with the increases in manufacturing technology usage to 83.2% are both driving factors to a potential increases in the overall profitability of the US manufacturing sector.
The proposed tax breaks being discussed in Washington could be the financial cushion manufacturing businesses need to move ahead in the coming year. According to the New York Times, “Joint Committee on Taxation estimated that about $75 billion of the tax breaks in the plan were aimed at businesses, including $13 billion for a two-year extension of the coveted research and development credit, which helps cover the cost of wages for employees involved in research. The proposal also commits $22 billion for accelerated depreciation, which in 2011 would allow businesses to write off 100 percent of their capital expenditures immediately instead of over several years.”
Combine this financial benefit with the American Machine Tool Distributors’ Association’s recent reports on drastic increases in manufacturing technology consumption nationwide, and it’s easy to see the path laid before the US manufacturing industry could lead to a rejuvenation of our global position.
“Never in the history of the USMTC have we seen a post-IMTS October rival September so closely,” noted Douglas K. Woods, President of AMT. “Increased Sec. 179 expensing and 50% bonus depreciation enacted in late September helped offset the declines we normally see after a show. Looking ahead, enactment of the pending tax package would give U.S. manufacturers a big boost heading into the New Year.”
So, in laymen’s terms, what does this mean to manufacturing executives around the country?
Executives of manufacturing companies that have not begun the move towards current manufacturing technology need to look into the options that the tax credits offer their business, and apply the financial benefit to a reevaluation of their existing business practices and technology usage.
The manufacturing economy needs to see growth, and growth means improved profits. Manufacturing technology is only real answer to reconstructing manufacturing to streamlined, profitable practices. Talk to a business consultant today about the options and tools available to your manufacturing business so you are ready to make the most of 2011.