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 This year dawns with signs of a
slowdown in foreign sales from New Hampshire's companies. Although exports
of locally made goods edged down in January by 3.2 percent from December,
they held up well as the stayed at high levels.
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 – a statistical process that equalizes monthly
performance for factors such as the number of days in a month and holidays.
How did New Hampshire exporters
fare in selling their products abroad this January in comparison to a year
ago? The changing conditions of the global economy over the last twelve
months had favorable effects on the demand for made in New Hampshire goods.
In January of 2005, state companies shipped abroad $16.9 million, or 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. Foreign shipments from manufacturing companies
fell in January by 3.8 percent from the previous month to $155.2 million,
adjusted for seasonal variation.
On an annual basis however, in January of this year sales abroad from state
factories were $5.3 million, or 9.5 percent, higher than in January of last
year.
Exports of non-manufactured goods went down 1.2 percent in January to $39.4
million, adjusted for seasonal variation. This group of shipments abroad
consists of agricultural goods, mining products, and re-exports which are
foreign goods that entered the state as imports and are exported in
substantially the same condition as when imported.
For the country as a whole, US exports of goods, seasonally adjusted, 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 could 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, Luxemburg, 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? A strong euro makes New
Hampshire's goods cheaper in the Euro Area’s single market and gives state
exporters an extra advantage.
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 last
January were 4.3 percent lower than in January of 2004.
National exports to the Euro Area
accounted for 16 percent of all US exports in January; after Canada, it is
the second largest destination of made in America goods. At the state level,
foreign shipments of goods from New Hampshire to the Euro Area accounted for
22 percent of all state exports in January.
In other words, one-fifth of all state exports – and consequently the
thousands of jobs tied to these exports - depend upon the economic
conditions of the Euro Area and the value of the euro. In January, New
Hampshire ranked eleventh in terms of dependence upon the economic health of
the Euro Area and its currency, the euro.
Will the recent surge in the euro boost up state exports? It doesn’t happen
right away. “It may not be until mid to second half of 2005...” argues Ellen
Beeson at Bank of Tokyo-Mitsubishi.
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