NAM's Timmons: AI and Tax Policy Drive Manufacturing Growth

U.S. Manufacturing is experiencing a major upswing, according to National Association of Manufacturers President and CEO Jay Timmons. In a late July interview on CNBC's "The Exchange," Timmons attributed the growth to the tax reforms made permanent in 2025 and the rising demand from artificial intelligence data centers.

Timmons told host Kelly Evans that business activity in July exceeded economists' expectations in key regional surveys. He held up a NAM flipbook documenting 50 manufacturer success stories across all 50 states as evidence. "It was boost because of this," Timmons said, referring to the tax policy. "So much of what we accomplished in that bill has allowed manufacturers to invest, to hire and to raise wages."

Policy and Regulatory Foundations

The collection of success stories demonstrates the impact of combining the 2025 tax law with regulatory certainty and what Timmons termed "energy dominance." This combination, he argued, sets the stage for strong manufacturing growth nationwide. Timmons expressed a specific desire to see more machinery production return to the United States. He noted that a significant amount of such manufacturing is currently done outside the country, but expressed confidence that U.S. Tax policies would help attract those investments back home.

The AI and Data Center Demand

Artificial intelligence is providing a significant boost to the manufacturing sector, according to the NAM leader. A key component of this is the need to build out the data centers that power AI systems. Timmons acknowledged that data centers consume substantial energy, using about 20% of U.S. Energy output annually, a figure that is still growing. However, he argued that the efficiency gains from AI ultimately benefit the broader economy. "AI is helping us make our operations far more efficient, much more productive," Timmons said. He suggested these productivity gains could, in the long run, help drive down the national debt while also creating jobs and raising wages.

Manufacturers play a vital role in this ecosystem. They produce the critical physical infrastructure required for data centers, including server racks, HVAC systems, and electric transformers.

Sector-Specific Growth Trends

Timmons provided an overview of growth across different manufacturing segments. He reported seeing a lot of growth broadly, in both durable and nondurable goods. He specifically mentioned appliances and textiles as areas showing growth, though he noted the expansion in textiles is not as strong as in other sectors. According to Timmons, metals and machinery are certainly growing. The broader economic outlook for manufacturing, as he presented it, is one of optimism fueled by policy and technological demand.