Despite political and social controversy surrounding the 2016 election, there are reasons for electrical contractors to be optimistic about the next four years. One potential benefit of electing a business executive is the expectation of economically minded policies and regulations.


Very few U.S. presidents have had experience in business, and the results in Washington have varied. Herbert Hoover made a fortune in the mining industry but couldn’t stave off the Great Depression, and Warren Harding ran a scandal-plagued administration despite his success as an Ohio newspaper owner. Harry Truman’s haberdashery nearly bankrupted him, but many historians consider him an accomplished chief executive. 


While President-elect Donald Trump carries the stigma of the uber-rich mega entrepreneur who answers to no one and lacks tact, he unquestionably found a constituency frustrated by the traditional power structure. However, that power structure in Congress is expected to temper and guide him. The Republican-controlled Congress may challenge his policy decisions, forcing him to justify every move and compromise extreme positions. 


If your company has survived a sluggish recovery with barely 1.5 percent annual growth over the past several years, you may be looking forward to a changing of the guard. After promising to double that growth rate, and rebuking the Federal Reserve for creating a “false economy” with its failure to increase interest rates in recent quarters, Trump has promised to push for major infrastructure spending, including transportation and energy projects. Dodge Data & Analytics predicted that up to $550 billion could be invested in public works projects and infrastructure in the next five years. 


Trump’s plan to overhaul and reduce tax rates to stimulate the economy would place a hard cap of 15 percent on business taxes, hopefully creating an incentive for job creators to stay onshore. The Institute for Policy Innovation, a conservative Texas-based think tank, rated his plan as “one of the most dynamic and pro-growth,” and the Center for Federal Tax Policy at the Tax Foundation, a nonpartisan tax research group, calculates that the plan would reduce taxes by nearly $12 trillion over the next decade, a reduction that could spur an 11 percent increase in the gross domestic product (GDP), 6.5 percent average wage increases and the creation of 5.3 million jobs. 


These tax cuts would reduce overall tax revenues by roughly $10 trillion, so Trump plans to adjust the top income tax rate upward from 25 to 33 percent and proposes the full expensing of capital investment. He has also pledged to reduce spending while promising to maintain Social Security and Medicare. The Tax Foundation predicts that federal spending would have to be reduced by 25 percent, or the deficit would substantially widen and potentially cause creditors to demand higher rates on U.S. bonds.


After the last round of premium increases and withdrawal of providers from many markets, the repeal of the Affordable Care Act (ACA) appears imminent. The replacement program is unclear, but it will likely be phased in over several years and retain some popular provisions from the ACA. Trump has stated he plans to keep the provisions on pre-existing conditions and the option for parents to keep their children on their plan until the age of 26.


Trump’s campaign rhetoric on immigration was controversial, but his policies are expected to be comparatively moderate. Trump has said that he will focus any deportation strategy on the 2 to 3 million undocumented immigrants with criminal records. Mass deportations are unlikely. Congressional leaders such as Speaker of the House Paul Ryan have indicated that the immigration measure Congress will craft will focus on border security and enforcing current laws. The loss of 11 million workers would reduce GDP by $1.6 million and reduce the loss of jobs held by citizens.


However, research by University of Virginia economics professor John McLaren found that immigrant workers actually create 1.2 new local jobs, many of them subsequently filled by American-born employees. The American Action Forum, a conservative policy institute in Washington, D.C., has estimated the cost of enforcing current law at between $400 and $600 billion dollars.


Moreover on immigration, Trump is considering increasing the prevailing wage requirements for H-1B visas, which allow employers to recruit and employ foreign professionals, to reduce the number of jobs held by legal immigrants and provide an incentive to give those jobs to citizens.


Trade policy changes and Trump’s effect on global relationships are still uncertain, and contractors with international projects will need to stay alert and be prepared to adapt. 


This election was undeniably contentious, but there are reasons to be optimistic for the electrical construction industry. The key to success will be in keeping an eye on developments, identifying opportunities, and leveraging resources to ride the trends and maximize profits for your business.