Pressing the Button On Manufacturing Plants
By the time you read this, the U.S. presidential election will have (finally) taken place. Unfortunately, our production process means I have to write this before November, which means the outcome will have already been decided…assuming something wild hasn’t taken place—or isn’t still going on. Regardless of who won, the impact on the food and beverage industry can’t be understated.
To build or not to build. That is the question which will be answered once the votes have been tabulated. As we saw in our 47th Annual Construction Survey, many F&B manufacturers were taking a “wait and see” approach to new builds or large expansions until after the election. We’ll finally get to see what the decisions on such projects are going to be now.
The president clearly can have a direct impact on the costs of such projects: taxes, incentives and so forth. Whichever way the election went, companies would have a more solid grasp as to what to expect with those elements and plan accordingly or make adjustments to existing plans. I think, though, that many companies were waiting on the vote because of issues that aren’t necessarily within a president’s direct control, namely inflation. There are a great many factors that go into what causes inflation, I won’t get into them here. The main thing is that inflation has an impact on consumer spending.
Despite pandemics, despite years of rising inflation and the increased costs of goods, consumers were still spending. I had seen that economists were a little baffled by this because high inflation usually causes consumers to hold on to their earnings. Remember all of those recession warnings that never came to fruition?
I think the election and the impact it would have on sales was the reason F&B manufacturers were hitting the pause button on larger projects. To them, it had the potential to destroy whatever confidence consumers felt to continue spending. Or it could bolster it. That not knowing made everyone wait with bated breath, and the election is their chance to exhale. It’s the shiny red button that nobody knows what it does until you press it.
We have our answer now (or I assume we do), and we finally get to see how things turn out. Regardless of who won, I’m hoping it spurs some great projects. FE
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