ITR distributed a blog post this week commenting on the likely impact the election will have on the US economy. Let me remark on the broad US industrial segment, which I would argue now represents 3 perhaps 4 of the figurative 8-cylinder engine powering the US Economy. In brief, ITR says the election result “really does not change” their outlook for 2017, and they continue to “expect a slowing economy in 2018 and economic decline around the first half of 2019”, as they had before November 8 [https://www.itreconomics.com/content/guarded-optimism].*
But here at Industrial Search Partners, client inquiry and interest in commencing outside search initiatives has spiked in the days since the election. That leads me to believe that the election of Trump – a complete surprise to most of the planet – will have much more than a minimal effect on US economic outlook. We need to build on the data ITR is basing its comments on, and that data set will come in the next few quarters.
After 18 years speaking with CEOs and Boards about strategic plans for growth, and the key hiring decisions to execute those plans, one thing is clear: contingency plans for the unlikeliest of election outcomes are being set into motion. Quickly.
In the case of anemic recoveries, the head-hunter’s business tracks with the economy. But in the case of more bullish sentiments and expected business climate improvements, our community is a historically very reliable, quantitative, leading indicator. Today, executive search is, again, a leading indicator of a US economy on the rise. We now see 2017 as better than predicted, and 2018-19 potentially significantly better (based on the data set that emerges in Q1 and Q2 of 2017, of course).
Boards, CEOs and their senior management teams are revisiting the contingency plans, if they even formed such a plan, for a Republican controlled House and Senate with a nominally Republican President. This is a condition which has existed in only 6 years over the last 7 decades. The unexpected, dare one say, collaborative, tone in DC following this unexpected outcome is being closely watched by US business. Sentiment about the broad industrial and manufacturing segment of our economy has already improved and is poised for an even more positive, fundamental change. As any Board of Director knows about a new CEO: the first 90 days will tell.
*ITR is an economic consultancy that offers forecasts, publications and webinars.