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Southwire Company CEO Stuart Thorn on a Morgan Stanley survey that businesses are not investing or hiring due to uncertainties over the economy and po...
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The -- gridlock hitting us where it hurts a new survey -- Morgan Stanley shows that Mortimer manufacturers.
Are cutting back on investments and new hires all because of uncertainty over where tax rates will be next year we are joined -- stores.
President and CEO of south where accompanying -- firsthand the impact of the stalemate on business -- -- thank you for joining us.
And let's get right to it how is it impacting your business.
Well it's impacting our business significantly because it impacts our customers' business south ourselves wire and cable that goes largely into the construction.
Of new homes new offices in commercial installations in factories.
And the the fact that there's -- -- -- -- business environment out there.
Is causing the construction markets remain depressed I mean when we when the Great Recession kicks in a number of years ago these construction markets fell for us by 506070%.
And it remained depressed ever since and are only gradually bottoming out -- beginning to recover.
And if our customers' sense uncertainty.
And they're bankers cents on certain -- and they're not gonna have the money to spend on new projects are and -- we will be able to grow our markets and grow our business.
Tax policy -- that about a slowdown in demand across the US -- Vince Reinhart is the chief US economist for Morgan Stanley he was out saying that you know 40% of the people that they surveyed.
Cited the fiscal cliff.
As a major reason not to go out and spend money.
Isn't really about tax policy -- about that fiscal clippers it just about you know a general -- out there.
Well I think both.
Are factors but we certainly hear from our customers that there are projects to be done.
However when it comes to funding hands and financing those prod projects even -- interest rates are very low.
-- they have trouble getting their hands on the cash.
Getting getting -- to lend to them because of this general uncertainty that exists within the economy.
So it's a combination of elements I mean it's it's complex.
Situation but certainly.
Risky business risk equals uncertainty -- equals risk so the more uncertainty there is.
The more risk you happen when it comes to taxes taxes are -- major element.
In terms of the cost structure of any business south wire our customers and so the higher the uncertainty and higher the risk the less likely you're gonna be a little -- and -- his followers with your projects but.
But interesting distinction that you make -- -- -- the demand is out there for the project that it's not that there is an error customers necessarily for whatever was -- -- -- Built they just can't get the financing.
Yes -- we hear that from our electrical contractor customers all the time.
That that there are projects to be done.
But.
Getting their hands on the cash is -- is another issue and also there's been a lot of project work over the last several years fueled by the stimulus monies.
And the government and -- to get -- as we approach this fiscal cliff.
And now that's trying government spending slows down that's going to also limit the the little market that those exist so you know it's kind of a two pronged.
It's a two sided sword -- -- weakened to one side green cut off in demand the other side being.
A from lack of funding what would make a difference for you what would make things better.
Well I think it is the solution is obvious at this point I mean.
There's a new in this election coming up there's been a lot of politics -- advance of the election.
Once the election is over we're gonna have a newly elected or reelected government in place 2013.
Will be in time for that government.
To it to make the compromises that need to be made to put -- -- -- a permanent solutions in in place.
So it's as if the patient is on the operating table in the surgeon will be walking in on January 1 gosh so why shoot the outpatient in the head.
On December 31 by killing the economy and going over this fiscal cliff.
On that criminality start we're gonna wrap it up straight -- itself wire president and CEO thank you for coming on tonight.
Okay thank you.
