Government Shutdown and the Packaging Industry

Government Shutdown and the Packaging Industry

In the last week, we have all heard that the effects of the government shutdown will only get worse the longer it lasts.  Some argue that the shutdown will have no effect on them, others are painting a doomsday scenario.  While the truth probably lies somewhere in the middle, there is no denying that there will be an effect and that it will be felt by just about everyone in some way, directly or indirectly.  Below are just a couple of the reasons we believe the packaging industry will feel this effect if our chosen leaders cannot reach some kind of agreement and get back to work.

In a very general sense, business spending is likely to decrease due in part to the fact that loans will be harder to obtain, or in the case of SBA loans, possibly not available at all.  Smaller businesses will be delayed if an SBA loan was a part of their business plan, and in reality, the uncertainty of the shutdown may mean harder to obtain loans across the board.  In addition, government contracts are likely to grind to a halt in most, if not all areas, creating less opportunity for those in the packaging industry.  If new businesses, current business growth and government spending are stalled, so will the manufacturing processes that provide the packaging machinery.

As an example, consider the booming business of distilleries and craft breweries.  Should the federal government shutdown continue, no new permits for these businesses would be distributed, according to a Washington Post blog.  Without the necessary permits, the industry itself is virtually shutdown to new owners and operators.  A major part of opening a new distillery is bottling and packaging the spirits.  Filling machines and other equipment projects will be put on hold unless and until the permits are once again granted by the federal government.

Of course, the shutdown of the federal government will also have an effect on the money being placed into the economy as well.  Food stamps and welfare programs, according to The Guardian, "...pump about $23m a year into retail grocery stores...", money that will no longer be entering the marketplace when those programs run out of funding.  As notes, over five thousand families in the state have already missed a payment because the federally funded state program is out of money.  The obvious result of less money is less buying power and reduced sales.  As businesses sell less, manufacturing of packaging machinery and other equipment will drop.

Of course, the packaging industry is not the only, nor the hardest hit, industry to be affected by this shutdown, but the above examples show how even the most unlikely candidates will be hurt by a prolonged shutdown.  To think that the shutdown is not serious or will not have consequences for each and every American is simply not being realistic.  We urge our elected officials to consider the effect of their actions on each and every American citizen and upon our country as a whole in reaching a compromise and a solution that will get our country running once again.  

For more information on the effects of the shutdown, check out the articles referenced above in The Guardian, The Washington Post and AZCentral.