THE FIRST SIX MONTHS OF THE TRUMP ADMINIS- tration have been marked by an unprecedented number of bold pronouncements that so far have produced nothing substantive in terms of legislation and have had little apparent impact on the course of the economy. Thus, the outlook for electrical distributors appears to be very similar to that of three months ago: continued growth of sales, but with consider- able variation among construction-related segments. The broadest indicator of the state of the economy is called real (meaning inflation- adjusted) gross domestic product (GDP). That measure grew at a 2.6% seasonally adjusted annual rate in the second quarter, according to the initial estimate by the Bureau of Eco- nomic Analysis on July 28. By comparison, real GDP increased at a 1.2% rate in the first three months of the year. The economy added an average of 180,000 jobs per month after seasonal adjustment for normal weather- and/or holiday-related variations in the first half of 2017. That was very similar to the rates in both halves of 2016. Most economic forecasters expect real GDP to keep chugging along at a 2% to 3% growth rate through at least mid-2018. Their predictions for job growth also show little variance from recent history.
These growth rates are unimpressive by historical stan- dards, but they are occurring at a time when expansion in much of the developed world is even slower. In addition, the U.S. labor force and labor productivity are both posting meager gains. With those headwinds, it is actually surpris- ing that GDP and employment are doing so well. Another surprise is that the stock market has continued to set new records. Many stocks jumped after Election Day 2016, seemingly on the expectation that Republican control of the White House and both branches of Congress would mean quick enactment of infrastructure spending increases, tax cuts, and repeal of the Affordable Care Act. Now the likelihood that any of those overhauls will become law in 2017 has nearly vanished; at any rate, there will be nothing large enough to affect the course of the economy in this year. That is not to say that the Trump adminis- tration has left no mark on the economy or on business prospects for electrical distribu- tors. There has been a significant change from the Obama administration in the promulgation, proposal, and enforcement of regulations affecting many types of businesses. Tougher immigration policies and rhetoric have led to a cutback in both legal and illegal immigration and stepped up both deportations and departure of immi- grants not directly under threat of deportation. And trade policy changes have led to steep tariffs on Canadian soft-
ELECTRICAL DISTRIBUTION CHANNEL PERCENT CHANGE VS. ONE YEAR AGO—ROLLING THREE-MONTH DOLLAR BASIS
Calculation of total out-the-door sales percent changes within a unified panel of full-line electrical distributor branches. Using same-branch
sales as an indicator, over the past six months, electrical product sales have increased by 2.6% over the same time period last year.
Vista Information Services sales tracking information is based on estimated sales from a representative sample of full-line electrical distributors located throughout the United States. For more
information on Vista, call 512-278-5800 or visit epicor.com/Vista-Information-Service.