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This year dawns with signs of a slowdown in foreign sales for New Hampshire
companies.
Exports of locally made goods edged down in January by 3.2 percent from
December, although they held up well. In the latest snapshot of the state’s
global business, sales abroad of goods made in the Granite State recorded
$194.6 million in January, adjusted for seasonal variation.
The changing conditions of the global economy over the last 12 months had
favorable effects on the demand for New Hampshire goods. In January of 2005,
state companies shipped abroad 9.5 percent more goods than in January of
2004. January’s exports were largely driven by manufactured goods, which
accounted for 80 percent of all state exports.
For the country as a whole, exports edged up slightly by 0.2 percent in
January to a record level of $71.2 billion, following a 4.4 percent jump in
December. The slowdown in the growth of exports combined with a surge in
imports generated the second-largest ever trade deficit in January.
Will the January slowdown in exports persist?
The New York based Economic Research Department of the Bank of
Tokyo-Mitsubishi conducts a monthly foreign trade survey to evaluate freight
levels of current and future shipments from trade centers, such as ports,
around the country. In the most recent survey, 24 percent of the respondents
expect exports to be higher over the next three months; no change is
expected by 52 percent, while the remaining 24 percent anticipate a decline.
“Export activity is expected to wane over the next three months,” concluded
Ellen Beeson, director of the Economic Research Department at the Bank of
Tokyo-Mitsubishi.
One of the major global developments in the last three years is the
so-called realignment of currencies, which relates to an enduring change in
a key currency against the dollar. Of main interest for international trade
is the strengthening of the euro.
Since February 2002, the euro has jumped 50 percent against the dollar,
implying that businesses and consumers from the euro area now pay 50 percent
less than in 2002 to buy American goods if their prices have stayed the
same. The twelve members of the euro bloc — Germany, France, Italy, Spain,
the Netherlands, Austria, Belgium, Luxembourg, Ireland, Finland, Greece and
Portugal — have opted to use the euro as their currency and their
integration has created the world’s second market after the United States.
Consequently, the euro area is the largest potential single market for New
Hampshire’s exporters. Have New Hampshire companies reaped the benefits of a
gradually rising euro that works its way in increasing state exports?
In January, $40.1 million of goods made in New Hampshire were sold to
euro-buyers. In comparison to last year, shipments to euro-companies were
4.3 percent lower than in January of 2004.
Will the recent surge in the euro eventually boost state exports? It doesn’t
happen right away.
“It may not be until mid to second half of 2005...” explained Beeson at the
Bank of Tokyo-Mitsubishi.
Maine exports increase
Following two consecutive monthly declines at the end of 2004, foreign sales
abroad of goods made in the Pine Tree State edged up slightly to $180.7
million in January, adjusted for seasonal variation.
In January, state companies shipped abroad 1.1 percent more goods than in
January of 2004.
Although Maine companies do not have a strong presence in euro-area markets,
they reaped the benefits of the rising euro in the last three years. In
January, $21.4 million of goods made in Maine were sold to euro buyers; more
important, this export volume was 43.9 percent higher than in January of
2004. Foreign shipments of goods from Maine to the euro area accounted for
13 percent of all state exports in January, compared with the national
average of 16 percent.
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