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April 1, 2024 Metal R&D Investment 2.5 times Higher Than US Average

New data reveals the US metal fabrication sector invested a total of $4.3 billion on R&D, up from $3.6 billion the previous year.

Companies in the US metal fabrication sector have increased their R&D investment by 26.4% compared to the previous year, according to the latest annual data. This growth is 2.5 times higher than the average across US sectors*.

As the industry looks to improve efficiency, cover skill gaps, and challenge market competition, companies in the sector invested a total of $4.3 billion on R&D, up from $3.6 billion the previous year. This is in the top 10 highest YoY increase out of all US sectors.

The analysis finds the recent surge is part of sustained investment in innovation from the sector — there’s been a 91.7% rise in R&D investment over the last 5 years, and a 131.6% increase over the decade.

The research, collated by R&D tax credit specialists GOAT.tax, analyzes up to 10 years of R&D investment figures in the USA using the latest available data** to highlight the sectors which are investing in innovation to fuel growth.

Specialist tax experts highlight that companies innovating in the sector could be missing out on tax savings, and are encouraged to examine their own R&D spend beside R&D tax credit criteria. Data reveals the average successful claim from the sector was $55,387 in 2022.

Alex Pak, Director in the R&D Tax Credit Consulting at Source Advisors, says: “Investment in R&D is no longer optional but a strategic necessity to stay ahead in the competitive landscape. We’ve seen through working with national and international firms in the metal fabrication sector the increased importance placed on being at the forefront of technology to improve existing services and identify new innovation routes”

“Examples of eligible R&D activities in the sector can include developing new components, a bespoke or alternative material processing method, or development of a new material. With specialist guidance, companies in the metal fabrication sector stand to realize substantial savings on their tax bills through R&D tax credits.“

Olivia Tian, Marketing Director at Raise3D, says:
“US manufacturing businesses are increasing R&D budgets to stay ahead in a rapidly evolving market. Innovation is vital across manufacturing for product development, process optimization, and staying competitive. By investing more in R&D, manufacturers can ensure sustained growth and market leadership

To be successful, R&D investment needs to be aligned to business goals and market demands. It’s only with strategic planning, collaboration, and data-driven insights, manufacturers maximize ROI and secure long-term success.

Data notes:

  • *+10.65% USA average YoY change in R&D spend from all business Calculated from sector data only
  • **Data source: https://ncses.nsf.gov/
    • R&D expenditures and R&D employees of for-profit, publicly or privately held, nonfarm businesses with 10 or more employees in the United States that performed or funded R&D either domestically or abroad

About GOAT.tax
GOAT.tax is powered by Source Advisors, a leading tax consulting firm providing R&D tax credits for over 4 decades. Founded on the basic principle that the R&D tax credit should be available to companies of all sizes without fees burdening the benefit. For additional information, visit https://www.goat.tax/

About Source Advisors
Source Advisors is a consulting firm comprised of CPAs, attorneys, engineers, and technology experts, many of whom have Big Four experience. These professionals primarily practice in the legislation that governs these incentives and assist CPA firms and companies to navigate the laws that continue to evolve and change.

For more than 40 years, the firm has assisted manufacturers and technology companies in maximizing government-sponsored tax credits, deductions, and incentives.

Source Advisors provides support and guidance to its clients relative to establishing systems for tracking expenditures and activities. It also prepares technical reports, financial workpapers, and other documentation in support of the client’s tax positions. Additionally, Source Advisors assists clients in the event that their tax positions are audited by federal or state government agencies. For additional information, visit www.sourceadvisors.com.

Research collated by GOAT.tax: https://www.goat.tax/r-d-tax-credit

 

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