Business hates uncertainty. Everybody knows that. Well, for months, Heavy Metal has been wondering when the prospects of President Donald Trump — the grand kahuna of every-time-he-opens-his mouth uncertainty — impacts the economy.
It's happened. The Wall Street Journal reported Aug. 12 that most economists in its survey now believe uncertainty from the November election is hitting economic activity.
Mainly, up to this point in history, uncertainty about a coming top-leader election has impacted the economy in developing countries, like those in Latin America. But in the United States? Not really. The establishment Democrats are not that different from the establishment Republicans.
Those were the days! Now we have Hillary Clinton, who has mind-numbing plans and details for meeting every single social need — (and she'll solve terrorism too!) — and Trump the billionaire, winging it and saying crazy-sounding things.
The WSJ quotes Kevin Swift, chief economist at the American Chemistry Council, saying: “This election introduces a Mount Everest of uncertainty.”
I cover the machinery beat here at Plastics News. I have asked quite a few people the question: This right now is big-time uncertainty — Obama liberal wonderland II or a man that seems unhinged more every single day? I run this by my machinery sources: If I owned a plastics factory, and was going to invest in five pieces of machinery this year, I probably would say, let's just hold off until after the election.
And the Journal reports that business investment has been weak. “At the heart of businesses' uncertainty is the question of what government policy changes might occur,” the newspaper reported.
So how does this shake out in the plastics machinery arena? The answer is it depends on what sector. For injection molding machinery — serving about three-fourths of the plastics industry, observers say — people have been telling me that any uncertainty about Clinton vs. Trump isn't really hurting sales. Why? Because the days are long past when a molder would buy machines in advance for expected business. Now they want the presses when they have the business signed up.
And then they need the injection presses ASAP if not yesterday.
So as long as Americans consume products, companies will need to do capital spending on injection molding machines. And I suspect this truism holds for the other types of plastics processing machinery — maybe to a lesser extent, but still….
Economic growth is pretty stagnant. But jobs are getting created. Is the sky falling, as Trump intones, or is everything great but we need more government ala Hillary, and Bill says so too?
I hope Trump calls me out as a member of the “disgusting and corrupt media.” I want to hear Donald Trump say the words “Plastics News.”