What impact does the coming political election have on the 2020 economy? As this month’s IHEA Executive Economic Summary reports, “Election years tend to depress consumers, business people and investors alike. The two parties try to outdo one another with tales of gloom and doom unless you vote for them and the sense is that the world is teetering on the brink.”
That being said, the report also encourages optimism when it states, “It should be noted that many of the index readings that turned negative are only slightly down and many are still higher than they have been much of the year.”
Metal prices, new orders and recorded in the PMI, capital expenditures, and the transportation index all trended upward in October. According to the report, the fact that the PMI has started to trend upward, even though it is still below 50, is a good sign for the months ahead.
Regarding capital expenditures, the report states, “The capital expenditures numbers are better than expected given the data on capacity utilization, but it seems there is still a demand for replacement equipment even if there is less demand for new equipment to support growth.”
With regard to the seven downward trending indices, the report states that “they are not all that bad.” Indices in this group include new automobile and light truck sales, new home starts, steel consumption, and industrial capacity utilization to name a few.
Concluding the report is the following statement, “These have not been massive drops and there is no sense of an impending crisis, but this kind of weakness doesn’t leave much wiggle room should there be a real recessionary trend. The overall sense of trepidation in the industrial sector is driving most of the current level of angst.”
For a full copy of the 12-page report, contact Anne Goyer, Executive Director of the Industrial Heating Equipment Association (IHEA). Email Anne by clicking here.
