We hear from all corners that the fiscal cliff, the dual whammy of deep spending cuts and higher tax rates set to kick in if Congress and the White House can’t agree to a budget plan, will hurt the economy. But just how much of a dent will it cause?
Today on Squawk, we got some answers from the National Association of Manufacturers. Already, the deadlock in Washington is causing some major concern among the nation’s manufacturers. Optimism among this group has plunged over the last nine months, according to the group’s latest survey. In March over 88% of those surveyed were feeling good about the economy; now, that number is just above 51%.
Why is a drop like that such a big deal? Because manufacturers employ 12 million people in the United States, and how they are feeling will determine whether they hire more workers – or fire them.
Here’s a couple of other concerning stats:
- This group now expects to see their sales increase by just 1% over the next year. Back in March, they were looking for sales gains of 4.7%.
- As a result, manufacturers are now planning on spending less. In fact, their predictions on capital expenditures have now turned negative for the first time since the fourth quarter of 2009.
- The same goes for hiring. 36.2% say they have either stopped hiring or even cut their employment as a result.
Bottom line: It’s bad news. And good reason for Washington to get to work.