HARDI economist helps make sense of post-election economy
Officials with ITR Economics like to point out that the 68-year-old research firm has an almost 95 percent accuracy rate when it comes to business trends and the economy.
But this year’s presidential election surprised even Alan Beaulieu, a principal at New Hampshire-based ITR and chief economist for the Heating, Air-conditioning and Refrigeration Distributors International. Not the result — Snips’ interview with Beaulieu was conducted before Donald Trump won an unexpected victory — but the climate surrounding the run-up to it.
“The political scene was much more extreme than I would have guessed a year ago. Who would have thought that?” Beaulieu said.
However, it doesn’t impact Beaulieu’s forecasting as much as some might think. While political candidates like to boast about the positive impact their election will have on the economy, the effect of any president is far more limited, Beaulieu said. Candidates don’t talk about that.
“They all imagine that there are a few magic levers that they can pull, but when you get there, it’s much more complicated than that,” he said.
He added that he’s not saying elections don’t have any impact. Just less than many expect.
“It’s not that it’s immaterial,” he said. “It’s immaterial in the short term. And in this case, the short term means 2017 and 2018.”
Congress is a buffer preventing — or at least slowing down — many major regulatory changes that could disrupt the economy. Large pieces of legislation, such as the Affordable Care Act — aka Obamacare — took more than three years to start to affect most businesses.
“Executive orders are a funny thing. You can only go so far with those,” Beaulieu said. “There’s no immediacy to any of this. You can always see the truck coming.”
Beaulieu offered an economic roadmap to guide HARDI members when he appeared during the group’s Dec. 3-6, 2016, conference in Colorado Springs, Colorado.
The economy is generally where Beaulieu and ITR staff thought it would be: in a pretty good place. Unemployment is just under 5 percent, and the housing market is pretty healthy. Interest rates are stable.
“There haven’t been any major changes,” Beaulieu said. “Oil behaved differently than we thought it would. It was softer. It’s been going up some but not as much as we wanted it to.”
That has negatively affected communities dependent on the oil and gas industries, although it also meant lower fuel costs for many businesses and families.
For HARDI members, the effects of lower oil prices are mixed, Beaulieu said.
“Some HARDI members see the benefit of that and other HARDI members see the lack of benefit because the jobs aren’t there or the people are moving,” he said.
The United Kingdom’s decision to leave the European Union was a surprise, Beaulieu said, although the process is slow enough that stock markets and world economies will have time to adjust.
“We are thinking that it will be a very amiable divorce because the EU needs the U.K. much more than the U.K. needs the EU,” he said. “It will be fine.”
And that’s the message Beaulieu said he was bringing to HARDI.
“One of the things I’m going to be trying to do at HARDI is to show that there are so many things that say good news for 2017,” he said. “Let’s make sure to factor those in instead of just concentrating on an election and today.”
By the time HARDI held its conference, the election was a month old. It was time to look ahead, Beaulieu said.
“There’s so many leading indicators pointing up right now. It’s hard not to get excited about the future,” he said.