North Carolina’s business environment has garnered national recognition, ranking as the top state for manufacturing and the second-best state for business climate in 2024. Unfortunately, the livelihood of our state’s $104.8 billion manufacturing industry is under threat if Congress does not take urgent action to reauthorize critical provisions set to expire at the end of this year.
In 2017, Congress passed the Tax Cuts and Jobs Act (TCJA), spurring immense growth in America’s manufacturing industry, including job creation, wage growth, and capital investment in North Carolina. The TCJA reduced the corporate tax rate from 35% to 21%, facilitating domestic investment incentives and allowing businesses to invest in local communities and workers.
The positive impact of the TCJA on America’s manufacturing sector was immediate. In 2018, an average 20,000 new manufacturing jobs were added nationally every month, compared to an average of 8,000 new jobs in the four years prior. Manufacturing capital spending increased 4.5% and 5.7% in 2018 and 2019, compared to only 1.4% in 2017.
In North Carolina, manufacturing comprises over 13% of the state’s GDP and employs more than 467,000 North Carolinians — nearly 10% of our state’s workforce. In 2023, nearly $40 billion in manufactured goods were exported from North Carolina.
From producing lifesaving treatments to developing critical defense systems, and creating new jobs every day, North Carolina’s manufacturers are vital to the health of our people and our economy. In 2024, life sciences investment in North Carolina totaled more than $10 billion. In addition to earning accolades as the No. 1 state for manufacturing, Charlotte and Raleigh were ranked the No. 2 and No. 5 best cities for manufacturing headquarters.
We are not interested in ceding any ground and, as the statewide affiliate for the National Association of Manufacturers, we urge North Carolina policymakers to extend the pro-growth policies in the TCJA to protect our state’s thriving manufacturing sector, which fuels our local economies and communities.
If TCJA tax cuts expire, 184,000 local jobs and $16.7 billion in employee wages are in jeopardy, and our state stands to lose over $33 billion in GDP. North Carolina manufacturers, workers, and small businesses are counting on Congress to pass a tax agenda that will keep jobs and capital investment in our state. Families’ livelihoods are at risk.
For the past seven years, the TCJA has made the United States a more attractive market for jobs and investment — primarily as a result of the 14% corporate tax cut. These cuts have kept American businesses competitive in the global marketplace and have helped foster innovation, local jobs, and economic growth. Manufacturers have been able to use the savings from the reduced taxes to grow their businesses, fund research and development, add new benefits for employees, expand their facilities, and invest in North Carolina communities.
During a time of increased economic uncertainty, North Carolina policymakers should prioritize policies that would bring security for our local businesses to keep investment in North Carolina and ensure America is not set back to a time of economic standstill. It is clear that the TCJA spurred growth in North Carolina’s manufacturing sector, resulting in overall economic growth for our state. If the TCJA lapses, our state’s innovation pipeline, economy, and local jobs will suffer — which means families will suffer.
There is no time to waste. For North Carolina’s manufacturing environment to remain number one, policymakers must act now and extend the TCJA. Together, we can maintain North Carolina’s national leadership for generations to come.
