US presidential election’s impact minimal on hiring, spending
US finance executives are generally unfazed by the potential outcome of the presidential election. But some are taking a wait-and-see attitude about who ends up in the White House.
More than 400 CPA decision-makers at US businesses were asked in August how the November 8th election would impact business planning, spending, and hiring.
Seventy-nine per cent said the election is not a factor in hiring decisions or that they would continue hiring at their current pace. A majority also don’t see the election figuring in capital expenditures and business expansion decisions. Half said it wouldn’t be a factor, and 31% planned to spend at their current pace.
Meanwhile, 15% say their companies are deferring hiring new employees until after the election, and 5% said they would reduce new hiring. Twelve per cent said they would defer capital expenditures and business expansion spending until after the election, and 6% said they would reduce such spending.
The results were part of the quarterly Business & Industry Economic Outlook Survey released last week by the American Institute of CPAs.
The election sentiment mirrors that of the first quarter, when the same questions were asked of 540 finance leaders. The earlier survey was conducted before Republican Donald Trump and Democrat Hillary Clinton, who represent the country’s two biggest political parties, had been officially nominated.
Andy Bonner, CPA, CGMA, the CFO at First Century Bank in Tazewell, Tennessee, said his company is waiting to hire and is holding off on some spending until after Election Day.
The privately owned bank, which has 95 employees and about $300 million in assets, has upgraded software to make changes in response to rules passed down from the Consumer Financial Protection Bureau (CFPB) in August 2015. Documentation changes on mortgages, including giving borrowers three business days to review mortgage documents and streamlining some forms, are among the rules detailed by the CFPB as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
A change in leadership in Washington could lead to changes in those rules, so First Century is trying to rein in spending until there is more clarity.
“We’re in a highly regulated industry,” Bonner said. “If the regulations change, we could have to come back and buy something else.”
Other businesses are not letting the election interfere with business plans. “I don’t think the election itself has an impact,” said Dennis Durkin, CPA, the CFO of Trend MLS, which has announced, but not yet completed, a consolidation with another real estate listing service.
‘Wait and see’
A change in leadership in Washington could lead to altered rules related to employee benefits such as health care, which is why Melissa Ruby, CPA, said her company would respond as needed after the election. Ruby is the controller at Melton Truck Lines in Tulsa, Oklahoma, which employs about 1,400 people.
“We’re a big ship, and it takes time and sometimes a lot of effort and lot of money to turn a big ship,” Ruby said. “We don’t want to get turned in the wrong direction, so we’re going to wait and see what’s going to happen.”
Related CGMA Magazine content:
“How the US Presidential Election Is Shaping Business Decisions”: Finance executives said the US presidential election will not factor heavily into their business planning, according to a first-quarter survey by the American Institute of CPAs.
“Companies Plan to Hire – If They Can Find Workers”: A growing number of US companies plan to hire more workers, but finding the right talent remains a concern, according to a third-quarter survey of finance executives by the AICPA.
—Neil Amato (email@example.com) is a CGMA Magazine senior editor.