Trump not good for gun industry bottom line

- A year ago Wednesday, President Trump was elected, kicking off quite a run on the stock market.  But his presidency hasn’t been good for the gun industry. 

This year something interesting is happening.

We have a Republican President and a Republican Congress, both typically supporters of the gun industry, and that’s actually been bad for the firearms business.

Rommel Dionisio, Managing Director at Aegis Capital says the United States’ consumer firearms market is as large as the rest of the world combined. 

He says it’s created a great deal of jobs and has grown tremendously, well north of Gross Domestic Product over the last several years.

Politics aside, whether you’re pro-gun or anti-gun, the firearms industry is a massive part of the U.S. economy that can’t be ignored.

According to the National Shooting Sports Foundation, the gun industry creates over 300,000 jobs and generates $15 billion in wages.

Jill Gonzalez, an analyst with WalletHub, says guns are a $50 billion industry, that produced $7.5 billion in federal and state taxes alone, last year.

There are three major publicly traded gun companies in the country: American Outdoor Brands which owns Smith & Wesson, Sturm Ruger, and Vista Outdoors which owns Savage Arms.

They have a combined market cap of just under $3 billion, which is small potatoes compared to a company like Apple, which is worth nearly $900 billion, but they represent big money nonetheless.

Besides the publicly traded gun companies, Rommel says firearms and ammunition are also a cash cow for sporting goods retailers. 

There are also a lot of sales happening at gun shows and mom and pop firearms dealers.

Rommel says it’s been a very fast growing industry and a lucrative one for manufacturers, distributors, and retailers over the last several years.

Not to mention, the NRA, which made nearly $434 million last year, mostly from membership dues and contributions.

The NRA spent more than $30 million of that money in support of Trump’s Presidential Campaign, according to the Center for Responsive Politics.

During President Obama’s two terms, the gun industry saw a surge in sales out of fear that gun control was coming.

We’ve seen the opposite in 2017.

Rommel says that when we entered 2017, retailers and distributors had bloated inventories as a result of incorrectly predicting that Hillary Clinton would be elected President.

Had she won, Hillary would’ve attempted to enact certain gun control measures.

Since Trump’s victory, Rommel says, retailers have been trying to sell down that inventory.

So even though there have been mass shootings, there hasn’t been a corresponding spike in demand for guns and ammunition.

With a Republican President and Republican led Congress, there’s less fear of tightening legislation than there was when President Obama was in office.

Here in New York State, the gun industry is hardly a booming business.

Jill says we have some of the lowest gun rates and kickbacks in the country.

About 50 cents goes back to the federal government from guns and ammunition, per capita in New York, the lowest amount in the country.

And contributions towards gun control and gun rights, in New York, average less than $500.

Those are also some of the lowest sums nationwide, Jill says.

Something to watch out for over the next few months: there is legislation pending in Congress right now that could be a big boon for the gun industry.

The Hearing Protection Act would loosen the restrictions on silencers, making them easier to sell.

Also, President Trump reportedly wants to ease regulations on selling small arms overseas.

That could boost foreign gun sales by 20% according to the National Shooting Sports Foundation.

So there’s a lot of money at play here.

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