Revised May 14, 2018

56.6%

61.7% 61.0%

77.8%

93.3%

89.5% 89.8%

94.6% 93.5%

2016:1 2016:2 2016:3 2016:4 2017:1 2017:2 2017:3 2017:4 2018:1

NAM Manufacturers’ Outlook Survey by Quarter(First Quarter 2016 – First Quarter 2018)

Source: NAM Manufacturers’ Outlook SurveyNote: Percentage of respondents who characterized the current business outlook as somewhat or very positive.

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

2016:1 2016:2 2016:3 2016:4 2017:1 2017:2 2017:3 2017:4 2018:1

Expected Manufacturing Growth Over Next 12 Months(First Quarter 2016 – First Quarter 2018)

Sales Exports Capital Investments Full-Time Employment

Avg. 12-Month Growth Rates Sales: ↑ 5.7%

Exports: ↑ 1.2%Capital Investments: ↑ 3.9%

Full-Time Employment: ↑ 2.9%Source: NAM Manufacturers’ Outlook SurveyNote: Expected growth rates are annual averages.

5.5%

5.7%

12.0%

15.0%

18.8%

64.6%

68.8%

74.7%

Weaker global growth and slower export sales

Challenges with access to capital

Weaker domestic economy and sales for our products

Strengthened U.S. dollar relative to other currencies

Unfavorable business climate (e.g., taxes, regulations)

Rising raw material costs for our products

Rising health care/insurance costs

Attracting and retaining a quality workforce

Primary Current Business Challenges(First Quarter 2018)

Source: NAM Manufacturers’ Outlook SurveyNote: Respondents were able to check all that apply. Therefore, responses exceed 100 percent.

50

52

54

56

58

60

62

64

66

68

70

Jan-17 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-18 Feb Mar Apr

ISM Manufacturing Purchasing Managers’ Index(January 2017 – April 2018)

Purchasing Managers' Index New Orders Production Employment

Source: Institute for Supply Management

-1.4%

-1.0%

-0.6%

-0.2%

0.2%

0.6%

1.0%

1.4%

1.8%

2.2%

2.6%

Jan-17 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-18 Feb Mar

Percentage Changes in Manufacturing Production(January 2017 – March 2018)

Manufacturing Durable Goods Nondurable Goods

Source: Federal Reserve Board

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

Jan-17 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-18 Feb Mar

Year-Over-Year Industrial Production Growth(January 2017 – March 2018)

Industrial Production Manufacturing Durable Goods Nondurable Goods

Source: Federal Reserve Board

74.0%

74.2%

74.4%

74.6%

74.8%

75.0%

75.2%

75.4%

75.6%

75.8%

76.0%

101.0

101.5

102.0

102.5

103.0

103.5

104.0

104.5

Jan-17 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-18 Feb Mar

Manufacturing Production and Capacity Utilization, January 2017 to March 2018

Manufacturing Production Manufacturing Capacity Utilization

Manufacturing Production (2012=100)

Manufacturing Capacity

Utilization (SIC)

Source: Federal Reserve Board

-1.2%

-1.2%

-1.5%

-1.6%

-2.0%

-4.4% Miscellaneous durable goods

Apparel and leather

Aerospace and other transportation equipment

Paper

Printing and support

Furniture and related products

1.0%

1.2%

1.6%

2.2%

3.6%

3.9%

4.1%

4.9%

5.0%

5.2%

5.4%

7.3%

8.2%

Petroleum and coal products

Textile and product mills

Electrical equipment and appliances

Plastics and rubber products

Food, beverage and tobacco products

Chemicals

Primary metals

Wood products

Fabricated metal products

Computer and electronic products

Machinery

Nonmetallic mineral products

Motor vehicles and parts

Year-Over-Year Growth in Manufacturing Production by Sector(March 2017 to March 2018)

Source: Federal Reserve Board

YEAR-OVER-YEAR GROWTHManufacturing (NAICS): ↑ 3.3%

Durable Goods: ↑ 3.8%Nondurable Goods: ↑ 2.7%

55.5

51.6 51.1

53.8

58.1

53.9

48.4

60.7

50.6

52.3

53.8 53.7

55.554.8

51.6

63.6

54.8

52.853.5

IHS Markit Purchasing Managers’ Indices for the Top 20 Export Markets for U.S. Manufactured Goods

(April 2018)

N/A

Source: IHS MarkitNote: Top 20 Export Markets Based on 2017 Data from the U.S. Commerce Department

Emerging Markets Manufacturing PMI: 51.3Eurozone Manufacturing PMI: 56.2

Global Manufacturing PMI: 53.5U.S. Manufacturing PMI (Markit): 56.5

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD

U.S.-Manufactured Goods Exports, 2000–2017 (in Billions of Dollars, Seasonally Adjusted)

Durable Goods Manufactured Goods Nondurable Goods

Note: Year-to-date data in 2018 are annualized based on data for the first quarter.Source: U.S. Department of Commerce

74

76

78

80

82

84

86

88

90

92

94

96

98

Trade-Weighted U.S. Dollar Index Against Major Currencies, 2014–2018

(Currency Units per U.S. Dollar, 1973=100)

2014 2015 2016 2017 2018

Source: Federal Reserve Board

The U.S. dollar has fallen 8.0 percent since the end of 2016 against major currencies, but has risen 4.0 percent since January 25.

Yet, since June 2014, the U.S. dollar has risen 16.3 percent.

259

200

73

175155

239

190

221

14

271

216

175 176

324

135

164

18 2110 10 4

14-4

39

620 30

3920

3122 24

Jan-17 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-18 Feb Mar Apr

Monthly Changes in Employment(January 2017 – April 2018, in Thousands of Employees)

Nonfarm Payrolls Manufacturing

Source: Bureau of Labor Statistics

3.8%

4.0%

4.2%

4.4%

4.6%

4.8%

5.0%

12.3012.3212.3412.3612.3812.4012.4212.4412.4612.4812.5012.5212.5412.5612.5812.6012.6212.6412.6612.68

Jan-17 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-18 Feb Mar Apr

Employment Situation, January 2017 – April 2018

Manufacturing Employment Unemployment Rate

Millions of Workers Unemployment Rate

Source: Bureau of Labor Statistics

0.6

2.8

4.7

5.9

7.1

10.5

10.8

13.8

14.9

16.8

20.6

23.0

30.842.4

54.0

60.4

Petroleum and coal products

Paper and paper products

Miscellaneous durable goods manufacturing

Wood products

Chemicals

Nonmetallic mineral products

Primary metals

Plastics and rubber products

Miscellaneous nondurable goods manufacturing

Electrical equipment and appliances

Transportation equipment

Computer and electronic products

Food manufacturing

Machinery

Nondurable goods

Fabricated metal products

Manufacturing Sectors with the Largest Net Employment Gains

(April 2017 to April 2018, in thousands of employees)

Source: Bureau of Labor Statistics

260

280

300

320

340

360

380

400

420

440

460

Jan-17 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-18 Feb Mar

Manufacturing Job Openings, Hires and Separations(January 2017 – March 2018, in thousands of workers)

Job Openings Hires Separations

Source: Bureau of Labor Statistics

1.2%

3.1% 3.2%

2.9%

2.3%

3.5%

3.2%

2.8%

2017:I II III IV 2018:I II III IV

Real Gross Domestic Product(Chained 2009 Dollars)

Real GDP Forecast:↑ 2.3% (2017)↑ 3.0% (2018)↑ 2.6% (2019)

Source: Bureau of Economic Analysis, NAM calculations using Moody’s Analytics simulation model

-0.25%

0.00%

0.01%

0.09%

0.11%

0.20%

0.43%

0.76%

0.97%

Residential Fixed Investment

Nondurable Goods Consumption

State and Local Government Spending

Federal Government Spending

Net Exports

Change in Private Inventories

Nonresidential Fixed Investment

Service-Sector Consumer Spending

Contributions to Percentage Change in First Quarter 2018 Real GDP Growth

First Quarter 2018Real GDP Growth

↑2.3%

Durable Goods Consumption

Source: Bureau of Economic Analysis

80

85

90

95

100

105

110

25

35

45

55

65

75

85

95

105

115

125

135

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Business and Consumer Sentiment Surveys

University of Michigan Consumer Confidence Conference Board Consumer Confidence NFIB Small Business Optimism

Consumer Confidence Indices

NFIB Small BusinessOptimism Index

Source: University of Michigan/Thomson Reuters, Conference Board, National Federation of Independent Business

0%

1%

2%

3%

4%

5%

6%

7%

Jan-17 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-18 Feb Mar

Year-Over-Year Growth in Retail Sales(January 2017 – March 2018)

Retail Sales Excluding Autos

Source: Census Bureau

0

200

400

600

800

1,000

1,200

1,400

Jan-17 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-18 Feb Mar

Housing Starts, January 2017 – March 2018(Seasonally Adjusted, at the Annual Rate)

Single-Family Starts Multifamily Starts

Source: U.S. Census Bureau

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Jan-17 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-18 Feb Mar Apr

Year-Over-Year Percentage Changes in Producer Prices(January 2017 – April 2018)

Final Demand Final Demand Less Food, Energy and Trade Services

Source: Bureau of Labor Statistics

1.2%

1.4%

1.6%

1.8%

2.0%

2.2%

Jan-17 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-18 Feb Mar

Year-Over-Year Percentage Changes in the PCE Deflator(January 2017 – March 2018)

Personal Consumption Expenditure (PCE) Deflator PCE Deflator, Excluding Food and Energy

Source: Bureau of Economic Analysis

Manufacturing Workforce –Growing the Manufacturing Talent Pipeline

Manufacturing Day

October 5, 2018

More convinced that manufacturing provides careers that are interesting & rewarding.

84%More aware of manufacturing jobs in their communities.89%More motivated to pursue careers in manufacturing.64%

Why We MFG Day1. Empower manufacturers2. Change public perception of manufacturing3. Introduce people to manufacturing careers4. Draw attention to the roles manufacturers play

in their communities5. Underscore the economic and social

significance of manufacturing

Heroes MAKE America• 10-week training program: CPT

certification and core manufacturing training

• Tours of manufacturing facilities, networking opportunities, manufacturing speakers

• Transitioning military, training becomes duty station

• Average cost: $3,000-$4,000 per soldier

• Goal of an 85% job placement rate

STEP AheadWomen are underrepresented in the manufacturing workforce. Women constitute one of manufacturing’s largest pools of untapped talent, representing only 29% of the manufacturing workforce.

STEP Ahead Awards highlight the achievements of women in manufacturing to:

• celebrate their accomplishments

• attract women to the industry

• encourage women to mentor and inspire the next generation of female talent to pursue manufacturing careers

The Institute has honored

803 women in manufacturing.

Apprenticeship• MI & USCCF joint paper on implementing and assuring quality in earn and learn

programs• USDOL TF is moving towards conclusion. Sec. Acosta has distributed USDOL

guidance on how it will consider organizations wishing to certify industry recognized apprenticeships (IRA).

• TF subcommittees have reached consensus on recommendations• Through the SAGs, MI is working with 6-8 states to explore potential state

incentives for IRA.• MI in partnership with USCCF, will seek foundation funding to support the

development of the QA model and infrastructure as described in the paper.