BLOOMINGTON, Ind. – Industry analyst FTR issued a note today, suggesting there will be a limited short-term impact to the overall US economy and transport industry as a result of last night’s election result.
The forecaster notes President Elect Donald Trump won’t take office for three months, and then any proposed legislation will take time to move through the legislative branch of government.
“There are certainly particular risks that arise any time there is a change in elected power; but there is little near-term change in the outlook for the US economy, as budgets are set and policies are intact until later in 2017,” said Noel Perry, transportation economist with FTR.
However, FTR suggested people in the transportation industry keep an eye on the following: Since the President does control foreign policy, trade agreements with the Chinese and Mexico are likely to be addressed early on in the new administration with the risk of an increase in inflation; Regulations and enforcement will be addressed and if electronic logging device (ELD) implementation gets sticky because of the FMCSA’s slowness in publishing complete technical standards, the new administration is much more likely to postpone the December 2017 deadline. That said, trucking regulations in general will not be a priority, FTR predicts.
If a major tax cut bill is in place by summer of 2017, it would likely stimulate the economy and add up to 1% to GDP growth for as much as a year. At the same time, trade negotiations could stimulate exports and raise the cost of imports, with an acceleration in inflation likely. That may force a significant raising of interest rates by the Federal Reserve, making recession in late 2018 or 2019 a distinct possibility.
FTR said it does not expect to change its industry forecasts based on the election results but will be monitoring any activity that may cause an adjustment and will continue to advise their subscribers accordingly.