Shutdown Revives Sense of Uncertainty about Health of U.S. Economy

Impacts from the shutdown will likely continue to be felt for several months.

Even if the latest proposal from the U.S. Senate passes through the House, it will likely take some time for the economy to return to "normal." The problems created by the government shutdown go far beyond people not working and people not getting paychecks. Research projects around the world have been put on hold and will take time to restart, and agencies that had backlogs going into the shutdown will likely see those increase.

Manufacturers and distributors who rely on government contracts may have to wait a while after the restart to see those orders actually pick up again.

In my conversations with distributors and manufacturers over the past few weeks, I've heard anecdotes about how orders from contracts that were awarded well before the shutdown were delayed in anticipation of the shutdown – meaning orders that were expected in the third quarter still haven't come through, and there's no word on when they actually will.

The awarding of new contracts, from construction to defense, were also put on hold for the most part, causing delays for manufacturers and distributors bidding on those projects.

But perhaps the biggest long-term impact of the shutdown is that it revives the sense of uncertainty about the health of the U.S. economy and the role that Washington is playing. In the third-quarter MDM-Baird Distribution Survey, respondents were asked about their biggest policy or regulatory concerns for business (excluding the Affordable Care Act). Several highlighted fears around political instability. "This whole issue of shutting down the government creates uncertainty which causes our customers to pull back in their growth plans," wrote one respondent.

Even if the current proposal passes (which at this time it is expected to do), its temporary nature – it funds the government through Jan. 15, 2014, and allows for continued borrowing to pay the nation's bills, including debt payments, through Feb. 7, 2014 – isn't likely to alleviate those concerns anytime soon.

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events


articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events



You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.