For the third straight survey, the inability to attract and retain a quality workforce was the top business challenge for manufacturers, cited by 76.7 percent of respondents (Figure 4). With robust job growth and an encouraging economic outlook, it has become increasingly difficult to find talent— something echoed in the sample comments.
The second major business concern was the rising cost of raw materials (65.3 percent), up from the third top concern in the prior survey. This finding is consistent with accelerating input costs overall in other measures, including the producer price index and other sentiment surveys.
The third greatest business challenge concerned rising health care costs (65.3 percent), with respondents anticipating that health insurance premiums will increase 7.6 percent over the next 12 months. More than 74 percent of manufacturers expect their premiums to increase by at least 5 percent on average next year. At the same time, roughly three in ten of those completing the survey expect their premiums to rise by at least 10 percent. Small and medium-sized manufacturers predict 8.3 percent growth in health care costs on average over the next 12 months, with large firms seeing 6.4 percent growth.
