Innovation surge in US metal industry: R&D investment grows 2.5 times higher than average

According to the latest annual data, companies in the US metal fabrication sector increased their R&D investment by 26.4 per cent compared to the previous year. 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 in R&D, up from $3.6 billion the previous year. This is in the top 10 highest YoY increase 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 per cent rise in R&D investment over the last 5 years, and a 131.6 per cent increase over the decade.

The research, collated by R&D tax credit specialists GOAT.tax, analyses 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 they are encouraged to examine their own R&D spending besides R&D tax credit criteria. Data reveals the average successful claim from the sector was $55,387 in 2022.

Alex Pak, Director of R&D Tax Credit Consulting at Source Advisors, said, "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 developing a new material. With specialist guidance, companies in the metal fabrication sector stand to realise substantial savings on their tax bills through R&D tax credits. "

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

"To be successful, R&D investment needs to be aligned with business goals and market demands. Manufacturers can maximise ROI and secure long-term success only with strategic planning, collaboration, and data-driven insights."

GOAT.tax is powered by Source Advisors, a leading tax consulting firm that has been providing R&D tax credits for over four decades. The firm was founded on the basic principle that the R&D tax credit should be available to companies of all sizes without fees burdening the benefit.

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 in navigating the laws that continue to evolve and change. For over 40 years, the firm has assisted manufacturers and technology companies in maximising government-sponsored tax credits, deductions, and incentives.

*+10.65% USA average YoY change in R&D spending from all business sectors. 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