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One thing seems certain: business attitude matters


The big question following the stunning Republican victories in the midterm elections—not just in the U.S. Senate, but also in governorships and statehouses—is whether 2015 will mark an end to political uncertainty or create an even more hardened version.

If AMM’s annual survey of metal executives is any gauge, greater Republican control over the levers of government should have a salutary effect on business, as many in steel, aluminum and other sectors expect 2015 to be better than the past year.

At least half of all respondents to the survey said that the year ahead should be better than 2014, with the expectation that the slow growth seen over the past two or three years could accelerate into more heated markets come the end of 2015 and the beginning of 2016.

More than 50 percent of respondents said that the election results should make the business environment more certain, with the rest saying that they were not sure what the outcome would be. Almost no one thought that Republicans winning control of the Senate would make things less certain.

Survey respondents said that growth in the U.S. economy would have a greater impact on business than potential growth in foreign economies, and that domestic growth would play the most significant role in determining the price of metal products in 2015. Still, most respondents said that the domestic economy will not fully turn around until 2016 or later.

The responses suggest that the dour concern about governmental leadership as the Great Recession and its fallout enters its ninth year (if we count its start as 2007) may be changing. Even so, it continues to resemble Japan’s so-called "Lost Decade" of the 1990s, a fate some economists tried to warn about as Washington began its hyper-gridlock six years ago. This may explain why so few respondents said they expect business to be worse in 2015 than the past year. It has to turn around more fully at some point, right?

There is still strong pessimism, cynicism and frustration seeping from the survey. Many of the comments reflected a lingering bitterness toward President Obama’s administration; something just doesn’t feel right about where we’re at right now, people are saying, and the government doesn’t seem to understand that.

If business does get better in the year ahead, it will be due more to private-sector factors than governmental issues. In the survey, nonresidential construction and the automotive sector stood out as keys for most metal executives—more than even the hope being invested in the energy markets.

It may come down to what often drives boom-and-bust cycles: human psychology. If businesses and their leaders have faith in where the economy is heading, and if consumers’ faith in the future is restored, then that faith eventually will translate into greater demand and faith will become fact.

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