On Display in Aurora, the Obama Ammunition EconomyBy Jim Tankersley | Sunday, July 22, 2012 | 7:07 a.m. Photo: AP Photo/Alan Diaz
BEND, Ore. – Two of the hottest-selling items in Tom Lewis’ gun shop are a once-banned model of semiautomatic rifle and a series of palm-sized pistols easily stowed in a purse or coat pocket. Together, they represent a firearms industry on a tear, soaring while the rest of the country struggles through an anemic recovery.
President Obama – or more specifically, gun owners’ fear of some still-phantom anti-gun agenda from his administration – has helped drive the industry’s gains.
It’s certainly not the only contributor but the Obama factor is large enough to raise the question of whether firearms manufacturing is a counterintuitive bright spot for the national economy, or another bubble waiting to pop.
The rifle leading sales is the AR-15, a civilian version of the military M16, and one of the weapons police say a shooter turned on a theater crowd in the Aurora, Colorado, killing 12. Some AR-15 models had been outlawed by the so-called assault weapons ban President Clinton signed but were legalized again when the ban expired under President Bush. Since then, domestic manufacturers have ramped up production and marketed the rifle aggressively for sport shooting, personal defense, and varmint hunting.
Sales of the AR-15 have been particularly strong, Lewis and shooting enthusiasts say, because gun owners worry it would be one of the first weapons Obama could attempt to prohibit.
The palm-sized pistols are .380 and 9mm calibers, favored by concealed weapons permit holders who want to be ready in the event that a similar shooter opens fire in their town; no one appears to have been packing one of them in that Aurora movie theater.
The rapid sales growth of those weapons, along with rounds of ammunition, has helped lead a surge in gun production and employment across America.
Lewis has owned his shop, Lost Creek Armory, for nearly 10 years, and worked in the gun-sales industry since 1989. His fast sales growth has cooled a touch lately but he expects it could rebound this fall, as Election Day nears. All told, he’s never seen business as strong as it has been over the last four years, not even in the final days before the assault weapons ban took effect in the 1990s.
“It seemed like it ratcheted up to a higher level (of growth) and stayed there for a longer time,” Lewis said.
Gun and ammunition sales surged in the run-up to Obama’s election in 2008 and haven’t eased since, according to a wide swath of government and industry data.
Companies that make, distribute, and sell firearms and ammunition added 23,000 direct jobs between 2008 and 2011 – a 30 percent increase, according to the National Shooting Sports Foundation, an industry group. The industry’s direct economic impact has doubled from $6.8 billion to $13.6 billion in that time, the group estimates.
Over the last two years, the two largest publicly traded American gun makers, Ruger and Smith & Wesson, have seen their stock prices climb by more than 150 percent each. Ruger told shareholders in May that its earnings nearly doubled from the first quarter of 2011 to the first quarter of 2012. It said it had temporarily stopped taking new orders, because its first-quarter orders had already surpassed orders from the entirety of 2011.
The Bureau of Alcohol, Tobacco, Firearms and Explosives said this month that 6.4 million guns were manufactured in the United States last year, up from about 5.5 million in both 2010 and 2009. The FBI is on pace to run 17.8 million firearm purchase background checks this year – a number that does not necessarily translate one-to-one to gun sales – up from 16.4 million in 2011 and 14.4 million in 2010.
Broadly speaking, there are three reasons for the surge, according to industry groups, firearms enthusiasts, and retailers, such as Lewis.
Core gun customers are panicked that Obama will champion new restrictions on gun ownership – even though that fear has proven unfounded so far. A wave of state laws has allowed more people to carry concealed weapons legally, opening a new market for small pistols. And economic anxiety has spurred many people who have never owned a gun, particularly women and senior citizens, to buy one for the first time.
It’s tough to tell from publicly available numbers which of those factors is the dominant one in driving firearms industry growth. If it’s a rush of new concealed carry permit holders and home-defense purchases, that could represent a permanent broadening of the industry’s customer base. If it’s Obama-driven, and he loses in November – or wins but continues to show no sign of enacting new gun restrictions – the fervor could cool.
As Lewis, at least, is well aware.
“I don’t want to convince myself this is how it’s always going to be,” he said. “Like the real estate market – things can change.”
Correction: An earlier version of this story referred to the AR-15 as an automatic rifle. It is semiautomatic.