With the election upon us, we have questions. We are anxious about how our decisions as a country will affect us and our companies individually. There are a lot of mixed opinions about whether or not elections affect the economy, and in turn the trucking industry. According a recent CNBC poll, only five percent believe that the election will have a positive effect on the economy, while 56 percent say that it will have a negative effect on the economy, and 39 percent say it will have no effect.
When we think about the economy, we often think about our jobs as well as the goods and services we use daily. Perhaps one of the most important things to consider is how we receive many of those goods—trucks. According to a 2014 report from American Trucking Associations (ATA), trucks moved about 67 percent of the nation’s freight by weight, resulting in $700.4 billion in gross revenue. In 2015, the numbers continued to climb with trucks moving roughly 81.5 percent of the nation’s freight and bringing in a record-breaking $726.4 billion. So, what happens in 2016 on the brink of an election?
A recent Washington Post article highlights a poll conducted by the National Association for Business Economics, which found that 11 percent of its members have postponed hiring or investing until after the November election. Additionally, more than half of the organization’s members said that this year’s election will be negative for the economy.
It’s no secret that Clinton and Trump have very different ideas on how to fix the economy, but with these ideas come uncertainty and fear. That said, many businesses are sitting and waiting to see what happens. A survey taken by small businesses found that politics ranked as the second reason that spending is delayed. For example, businesses are worried about how new tax rules and government regulations will affect them. Further complicating the election’s effect on the economy, many people are worried that even after the election congress will remain divided on many issues.
On the other hand, a recent article published by CNN Money states that politics have a surprisingly small impact on portfolios, and that stocks typically rise over time regardless of who is president. Rather, your emotional reaction is what matters. However, it is not to say that political values do not affect investment behavior whatsoever.
Analysis results published by Wells Fargo state that the notion that elections cause a slower economy holds no water. Further, they found that GDP growth, consumer spending growth and business fixed investment growth are stronger during election years than in non-election years. The study found that there are no statistically significant differences in government spending growth, federal government spending or job growth during elections. The analysis concludes that there are many different factors that can affect the economy.
Regardless of who gets elected for president, it is important for trucking industry professionals to influence government officials and policies as much as possible. This includes individuals scheduling meetings with powerful federal government officials, and explaining the impact that their products or services have on the public. Taking action also includes letter writing, lobbying, or hosting a party member at your place of business to show them how your operation works. Only by being proactive will trucking industry professionals shed a light on concerns and issues that face real people every day. This has to happen regardless of the election.
In a Transport Topics article, Steven Parker, President of Baltimore Potomac Truck Centers, highlights one the the most pressing issues in the industry. Parker argues that perhaps the most dangerous tax to fleet operations and the retail market is the federal excise tax (FET). According to his article, the FET was imposed in 1917 to defray the cost of World War I. The tax on highway heavy-duty trucks, tractors and trailers has grown from three percent in 1955 to 12 percent today. It is no surprise that trucking companies are severely struggling with the rising costs of regulatory compliance. Although there are bills underway opposing a hike on the FET, it is crucial that industry professionals contact their congress members and address this issue, among many others.
So does the election affect the trucking industry? It depends on who you ask. The opinions remain divided, but one thing remains constant: it is up to us, the people, to take a stance.