US Companies Point to Increased Federal Regulations as Barrier to Growth
Specialty chemical manufacturers have identified federal regulations as a barrier to growth in a recent industrywide Business Outlook Survey conducted by the Society of Chemical Manufacturers and Affiliates (SOCMA) in partnership with UBM.
According to the survey, more than half of those who responded say federal and state regulations were a significant barrier to growth last year and will continue to be a barrier in 2015. Responses also indicate these companies expect to spend more money on regulatory compliance this year than last year, and a quarter of respondents say they would need an improved regulatory environment before deciding to expand their manufacturing business.
"The survey results underscore the need for federal lawmakers to work harder for specialty chemical manufacturers," said Lawrence D. Sloan, SOCMA President and CEO. "Onerous and inefficient regulations deprive our members of significant growth opportunities."
When asked to select the biggest risks to supply chain stability, companies repeatedly chose "regulatory pressures" among the top three responses. This option ranked second only to "global competition." Rounding out the top three risks was "availability of suppliers."
"There is a place for-and often a need for-effective, efficient regulations that help protect the environment, instill public confidence in our industry and protect workplace and consumer safety," said Sloan. "Unfortunately, there are regulations on the books now that ultimately impose significant burdens and costs that impact companies of all sizes. The majority of SOCMA members are small and medium-sized businesses, which often feel a disproportionate impact of these regulations. We need smarter regulations that will achieve their intended goals without compromising industry's ability to innovate and compete in the global marketplace."
Overall, the Business Outlook Survey found that specialty chemical manufacturers are demonstrating increased confidence in their marketplace, indicating plans for new product growth and capital investments in 2015. Concerns surrounding regulations suggest that if these regulatory barriers were addressed, companies would be able to allocate further resources to innovation and growing their businesses.
It is also clear from this survey that specialty chemical manufacturers play a key role in the global economy. This in turn demands a keen understanding of often complex foreign regulations that will help the industry reach the 95% of consumers who reside outside the US. SOCMA understands the increasing importance of access to new markets, and is a staunch supporter of free trade agreements that will enable its member companies and other specialty chemical manufacturers to grow and create new jobs.
While optimism is a bit measured in some areas, the overall results of this Business Outlook Survey are encouraging and reflect a growing optimism about the general economic climate.
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