Government weighing on industry growth

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Jonathan Sweet, Editor in Chief
April 1, 2014
Filed under Features, Top Stories

Most feel regulations, policies hurting their companies

Thom Dammrich, president of the National Marine Manufacturers Association, said at the Miami International Boat Show that the two things that worried him most were “weather and Washington.”

P14x15-BI14APR-MonthlyResearch.inddClearly, he’s not alone as the latest Boating Industry research shows that readers are very concerned about the impact of government action on their ability to be successful in the marine industry.

We surveyed dealers, marina owners, manufacturers, suppliers and others via the Internet in February. More than 60 percent said they consider government and regulatory issues to be very important to their company’s success. All told, 90 percent said these issues are at least somewhat important to their success.

For an update on some of the hot issues, you can read more by clicking here.

Taxes, Obamacare and Ethanol

The survey results show that three major issues are top of mind for most in the industry: tax policy, The Patient Protection and Affordable Care Act (Obamacare) and ethanol.

Nearly 60 percent of respondents named one of those three issues as the single most important to their business, with taxes and healthcare at 20 percent each narrowly edging out ethanol at 19 percent. Environmental regulations, at 14 percent, was the only other issue cited by more than 10 percent.

Obamacare seems to present the most interesting case when it comes to how important the issue is to the industry. Sixty-seven percent said they are very concerned about the impact of Obamacare on their business, the highest level of any issue. At the same time, 10 percent said they are not concerned at all, one of the highest levels for that category. Most likely, this reflects smaller companies that the law does not apply to.

When it comes to ethanol, 63 percent are very concerned about it, while 96 percent are at least somewhat concerned. Tax policy rounds out the top three again, with 81 percent very concerned about it and 97 percent at least somewhat concerned. Of least concern was issues related to fishery management and invasive species. (See the chart for the full breakdown.)

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Hurting growth

More than two-thirds of respondents said that government regulations have hurt their ability to grow their businesses in the last year.

We asked those who said that their business had been hurt to provide details, and more than 150 did so. The most commonly cited reason was the impact of healthcare reform, from increased costs of covering employees to decisions not to hire more employees in order to avoid some of the Affordable Care Act requirements. Environmental regulations actions from ethanol to emissions were also a common answer.

Many also mentioned feeling the impact of the effect of government regulations on other businesses that resulted in their business-owner customers not being willing to spend money on a boat in the current climate.

The following are a representative sample of some of the responses:

•  “Our customers fear that they won’t have enough income to cover their everyday costs, much less have money to spend on boating.”
•  “Federal restrictions on off-shore fishing continue to reduce the demand for boats and equipment.”
•  “Not knowing the cost to hire new employees, we have decided to wait until late in the year to decide if we will hire anyone.”
•  “Ethanol has cost boaters millions of dollars for repairs, increasing the cost of ownership, which drives boaters to other form of recreation.”
•  “Healthcare act has increased our plan costs by 28 percent this year.”
•  “Compliance requirements used up time and resources which could have helped grow business.”
•  “Uncertainty in government resulting in loss of consumer and corporate confidence resulted in loss of sales.”
•  “The restrictions on others reduces the amount they spend with us.”
•  “Emission standards have made boating unaffordable.”
•  “Over regulation via Dodd-Frank has negatively impacted lending parameters.”
•  “Permit process is too long and expensive.”
•  “Short fishing season and catch limits keep people from wanting to purchase a new boat.”

Getting involved

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The good news is that many respondents are trying to do something about the impact of the government on their businesses. More than three-quarters said they have taken some sort of action in an attempt to affect public policy.

Fifty-eight percent reported contacting an elected representative’s office to express their opinion on issues and 38 percent said they have met with a representative in person. About 34 percent have responded to a call to action from NMMA, the Marine Retailers Association of the Americas or some other group.

Only 13 percent have attended a legislative session or conference at the state level and only 7 percent have attended the American Boating Congress in Washington, D.C.

 

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