I was in Boston, MA, during the recent U.S. election. As a Canadian, it was interesting to share such a cultural and political event with locals. On Wednesday morning, just hours after the polls closed, there was a lot of shock and despair but there were also many people who were relieved and excited to have a change in leadership. Regardless of which camp you see yourself in, new leadership in the White House is likely to create change.
To bring this discussion to trucking and transportation, I sat down with Bison's Chief Financial Officer, Damiano Coniglio, to talk about the economic outlook for 2017 and how he thinks the Trump Presidency may impact our economy and the trucking industry as a whole. Please take some time to watch the video below and let us know what you think the 'Trump Effect on Trucking' will be.
Current Economic Conditions (relating to trucking):
So, how will 2017 stack up against 2016? In a word … better!
- While the Canadian economy has been struggling over the last several months, we saw improvements at the end of the third quarter and into the fourth. The Canadian economy grew by 2.3% over the latter half of the year as Alberta started to rebound from the wildfires.
- The Canadian economy will improve in 2017 as the federal government continues to roll out its infrastructure spending program and trade prospects improve as the US economy picks up steam. The GDP is expected to increase from 1.2% to 1.9%.
- Western Canada will act as a catalyst for growth, rather than a headwind, with BC and Alberta’s economies leading the way with expected GDPs of 2.5% and 2.0% respectively. BC continues to lead the West with its strength in the manufacturing and processing, technology, and service sectors. Alberta will see growth from the return to modest investment in the oil patch and the rebuild from the wildfires.
- As for the US, its economy has been the best performer among the G7 in 2016 and is expected to see continued momentum under a Trump presidency: the GDP will increase from 1.8% to 2.3%.
- A Trump presidency will see the US reduce personal and corporate tax rates, significantly increase infrastructure spending and support energy development. This policy direction is not new and harkens back to the Reagan years when the US economy had been underperforming.
- Some analysts speculate that Trump’s economic policies could add anywhere from 0.5% - 1.0 to current estimates of the US GDP. Trump himself touts that his plan will “no doubt double GDP”.
- The market has responded positively to the Trump presidency with the US and CDN indices up more than 5% since November 11. Transportation is the best-performing industry sector, increasing more than 25% since the election."