We’re hearing more and more that there are two different stories going on in the U.S. economy: 1) the consumer is making a big comeback thanks in part to the recovering housing market and 2) business confidence is tumblingd due to policy uncertainty surrounding the fiscal cliff.Railroad giant CSX transports tons of goods everyday across the eastern U.S., which makes it a reliable bellwether of the economy.
We just spoke with CSX CFO Fredrik Eliasson to get a sense of what’s really going on in the economy.
And during our conversation, one theme became clear: uncertainty has businesses in a holding pattern.
We asked him about how the fiscal cliff — the fast-approaching expiration of key spending plans and tax cuts — was affecting them and their customers.
“There’s two ways to look at it,” said Eliasson.
- Logistics and purchasing managers: “There and constraints in terms of how much inventory they want to take.” It’s consistent across the board and it’s very similar to what we experienced last year when Washington debated the debt ceiling.
- Senior level executives: “Companies want to build new plants and expand existing facilities,” he said. “But there’s a clear reluctance to pull the trigger at the senior level.”
For now businesses are only concerned about maintaining business as is rather than taking risks and investing for growth.
We asked Eliasson who he thought would be the better President for the U.S.: Barack Obama and Mitt Romney.
“The most important thing” is a leader who “focuses on creating certainty,” he said.
Eliasson noted that many customers plan for growth 30 to 40 years ahead. However, they are unwilling to execute these plans if they know the regulatory landscape can change in a matter of months.