Presidential problems

Businesses experience ups, downs as election day draws near

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JEROME A. POLLOS/Press Aaron Fisk, a salesman at Knudtsen Chevrolet, walks in front of a line of new trucks Friday at the dealership in Post Falls.

Usually before a presidential election, Eve Knudtsen said, business "gets weird."

As in customers are more hesitant to make big purchases, the owner of Knudtsen Chevrolet observed.

"Just anticipation in seeing how things may change after the election," Knudtsen said. "I usually look for some of this to happen in October."

But maybe not this year.

"I have a sense it's not going to be the case this year," she said, pointing out that Knudtsen Chevrolet is up 40 percent in new car volume this year. "The consumer confidence is there."

Some businesses in Kootenai County say that customers and companies alike hold off on big spending decisions before a presidential election.

And some local companies are seeing that more this year than others.

According to regional economist Alivia Metts, taxable sales in Kootenai County dropped nearly 24 percent from July to August, falling to nearly $119.8 million. That's also down 5.4 percent from last August.

Yet national consumer confidence improved around five of the last eight presidential elections, according to the National Association of Realtors.

On average, the Consumer Confidence Index rose 5.2 percent in November of presidential election years.

"There are studies out there that statistically show that consumer confidence typically rises from October to November during an election year," Metts stated.

Knudtsen said she can see reasons to be wary this election season.

Business owners are waiting to see if changes are in store for the new health care overhaul, for instance. Others are worried about possible changes to the income tax code, which could impede the execution of capital investments, Knudtsen said.

"Sometimes that weighs heavy on people's minds," she said.

But the company has had a "robust" year so far, she said, and there's no sign that won't continue.

"People got sick and tired of being sick and tired," she said of consumers. "They just decided that after waiting for the sky to fall in, it hasn't fallen in. So let's go ahead and buy."

Ron Nilson, president and CEO of Ground Force Manufacturing, wasn't so optimistic on Friday.

Returning from a mining show in Las Vegas, Nilson said that corporations around the world are holding off on major investments, including purchases from Ground Force.

"There's no question," Nilson said of that stemming from the pending election. "We work with Caterpillar Tractor, one of the largest corporations in the world, and right now they're holding their money to their chest, afraid to make an investment."

There's concern about whether taxes will be raised, Nilson said, and also anticipation of the next administration's general attitude toward businesses.

"It isn't just people in America reluctant to make capital investments. It's the rest of the world," said Nilson, whose Post Falls company does much of its business overseas.

He has seen similar patterns before presidential elections, but "I don't think it's normal," he said.

"Every consumer in the world is concerned about the unknown," Nilson remarked. "This presidential election is an unknown."

Yet home purchases appear to be up this year, pointed out Christy Oetken, Realtor with Windermere/Coeur d'Alene Realty.

Oetken noted that there have been about three times as many showings for multi-million dollar homes this year than last year.

Waterfront property sales jumped up to 120 between January and September, compared to only 81 in that time last year. She tallied 232 sales of homes with acreage through September, compared to 186 in that period last year.

"That's a good indicator of people buying something that they don't need," Oetken said.

Expecting sales to continue, she attributed the success to low prices.

And to the election year.

"I have seen that usually in an election year, we have a better year," Oetken said. "I think it's because the incumbent is always trying to make everything look as good as possible in an election year."

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