By Kari Williams
From the March/April 2024 Issue
Leaders in the manufacturing industry are “bullish” when it comes to the economy, future earnings, and digital transformation, according to a recent State of Manufacturing report.
“Manufacturers are overwhelmingly positive on both the economy as a whole and their prospects to increase revenue,” stated the WIPFLI-produced report, State of Manufacturing: 2024 Outlook Report for Manufacturers. “Nearly four in five survey respondents feel more optimistic now about their financial prospects than they did at the start of 2023, and almost nine in 10 project revenue increases in 2024.”
“Continuing to embrace new technology and digital transformation will likely be important for manufacturers as they look for ways to capture the opportunity at hand and tackle the challenges they face.”
— Deloitte
One of the takeaways from this report was that nearly 100% placed “some level of importance on digital transformation and technological advancement,” but just under 50% use robotics or automation, and only 36% have implemented use of artificial intelligence.
Similarly, the 2024 manufacturing industry outlook from Deloitte found that continued investment and growth in the manufacturing industry across the U.S. is expected throughout 2024.
“Continuing to embrace new technology and digital transformation will likely be important for manufacturers as they look for ways to capture the opportunity at hand and tackle the challenges they face,” stated the report.
The Deloitte analysis also suggested several avenues to combat, among other issues, economic uncertainty, and skilled labor shortages, including the use of digital tools.
Manufacturing accounted for 11.4% of total U.S. Gross Domestic Product (GDP) and nearly 10% of total U.S. employment in 2022, according to the U.S. Department of Commerce’s National Institute of Standards and Technology.
NIST also found that manufacturing comprises 17.5% of global GDP and has fluctuated between 13.7% and 17.5% since 1970.
Nevada: Ample FTZ Sites, Strong Tax Structure
Nevada is a business-friendly state. The main reasons for that are low-cost startup, regulatory, licensing, and annual fees, taxes and tax structure, privacy of business owners and competitive utility rates for commercial operations.
Nevada ranks as a seventh-best state in the Tax Foundation’s 2023 State Business Climate, an independent ranking of states in five areas of taxation: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property.
The Tax Climate Index comparison to neighboring states is significant: California ranks 48th, Arizona 20th, Idaho 21st, Oregon eighth and Utah ninth.
The combination of transportation infrastructure and the geographic location—proximity to west coast and California markets and businesses, reduced shipping and storage costs—are important reasons for businesses to stage their operations in Nevada. Locations in Nevada provide less than one-day’s drive to 60 million customers and five major U.S. ports serving the Pacific Rim.
“Nevada’s natural resources, people, reasonable cost of living and doing business, and proximity to west coast tech-hubs have enabled innovation to flourish in the state.”
— Tom Burns, Executive Director, GOED
“Nevada’s natural resources, people, reasonable cost of living and doing business, and proximity to west coast tech-hubs have enabled innovation to flourish in the state,” said Tom Burns, GOED Executive Director. “This new strategy will be critical to the continued growth of our economy.”
For businesses in key industries willing to make multi-year commitments to jobs and capital investments, Nevada offers several packages of incentives and programs to assist businesses.
GOED identifies advanced manufacturing as a key, and target, industry in the state. The Nevada Tax Abatement incentive package has proven to be an excellent fit for all facets of manufacturing, as well as attracting, promoting, and maintaining a strong, healthy, competitive manufacturing sector.
For companies seeking to relocate or expand their manufacturing operations, Nevada has been able to provide industrial-scale real estate, with major industrial parks already developed, and prime land available and zoned for industrial use. Companies have been able to find a facility or work with one of Nevada’s many industrial developers to construct a build-to-suit facility that fits their unique needs. Additionally, Nevada has very competitive utility rates for commercial operations.
Nevada has also become a major player in the electric-vehicle supply chain, particularly in the manufacturing space. The state has many businesses centered around the production of lithium, or that have products that require lithium, including refurbishment, recycling, refining, and remanufacturing of sustainable battery materials—making Nevada one of a few locations, maybe the only location, in the world with a complete lithium supply chain.
Nevada has more than 7,500 acres of flexible, available Foreign Trade Zones (FTZs) that offer a great advantage to manufacturers (and many other) companies when it comes to duty fees, taxes, and international shipping costs.
For more information, visit goed.nv.gov.
