SEATTLE — Businesses’ growing confidence in the U.S. economy is matched only by their uncertainty about how President-elect Donald Trump’s administration will affect their bottom lines, economists told business leaders and public officials in Seattle on Thursday.
Jobs and consumers have come back since the Great Recession, which hit Washington in 2008. But companies have delayed capital investment, opting to sit on cash rather than invest.
Generally, companies expect the federal government to ease regulations and cut taxes in the coming years, said Karin Kimbrough, a senior economist with Bank of America Merrill Lynch, at the Economic Development Council of Seattle and King County’s 45th annual Economic Forecast Conference.
But what that means for individual businesses and industries is far less clear. Many executives expect the federal government will make it easier and less costly for companies to bring back profits made overseas, but “will there be other demands put on companies for repatriating profits?” she said.
Similarly, proposed tax cuts are expected to help businesses, but how much, when and which ones are just some of the details that haven’t been defined yet, Kimbrough said.
“It affects how companies use their case, their balance sheets and long-term investments,” she said.
November’s election bolstered the political position of trade skeptics calling for a turn away from mulitlateral and open trade agreements, in favor of more bilateral deals, Kimbrough said. That shift “could give short-term gains” but “will not benefit us” in the long term.
Question marks surround the incoming administration’s guiding ideology. Trump has no track record in public office and has espoused a broad range of political positions, confounding traditional labels, such as Reagan Republican or neoconservative. His circle of advisers and appointees cover a broad range of ideology, from moderates such as his daughter Ivanka Trump to Steve Bannon, former head of the right-wing Breitbart News.
“The ability of business to know what the regulatory environment is is important” to all companies, said Chris Mefford, president of Community Attributes Inc., a Seattle-based consulting firm.
Even before taking office, Trump has displayed an eagerness to personally intervene in individual federal acquisitions and specific business decisions, such as replacing Air Force One or where Carrier Corp. makes air conditioners.
“The things he’s spoken about are not helpful to growing our economy,” Mefford said.
In particular, Trump’s comments about employment-driven immigration and international trade have made many business leaders here anxious, he said.
The president-elect’s use of Twitter as a bully pulpit to target Boeing and others only has added to the anxiety. Since Election Day, he has fired off dozens of Tweets, heavy on bombast but short on policy specifics. That has left business leaders grappling with how to interpret tweets that make sweeping generalizations with little apparent consideration of their potentially big, lasting implications, Mefford said.
Despite the uncertainty ahead, companies have not slowed down hiring, said Anneliese Vance-Sherman, a regional labor economist with the state.
A slowdown ahead of the election would have been normal, but instead, companies continued adding workers, driving the unemployment rates in King and Snohomish counties down near pre-recession levels, she said.