Global: Weak dollar boon for exporters
February 22, 2008
With the continued weakness of the American dollar against the Canadian dollar, the euro and others, local companies have continued to expand their market into exporting products to a variety of numerous oversea companies.
According to a 2007 Massachusetts report on exporting, Canada topped the list with a combined export dollar value of $3.1 billion, followed by Germany at $2.1 billion, Netherlands at $2.06 billion, United Kingdom at $2.05 billion and Japan at $1.98 billion. Among the top ten, the greatest increase in Massachusetts exports went to Japan, an increase of 16 percent over 2006 and Taiwan, who increased 35 percent over the previous year's numbers and finished 7th overall.
"There are a lot of reasons why businesses are getting into exporting but one of the key ones is the greater general level of awareness of the markets overseas and the opportunities they can afford businesses in this state," said Paula Murphy, director of Massachusetts Export Center. "Businesses are realizing there are more potential customers and a stable market base, which is very important, especially now that we are facing a recession."
Exporting to a variety of markets helps in stabilizing both large and small businesses, similar to the way diversified financial portfolios help increase an investor's chance at raising their investments, Murphy said.
And, she added, while businesses can be leery to get into exporting markets for a number of reasons including a fear of the unknown and credit concerns from overseas sales transactions, there is help available from state and local assistant centers.
Companies don't have to go it alone, she said."There are a lot of resources out there for businesses that can help council them through the process, find customers and provide a link to markets that will help the experience to be less daunting," said Murphy. "You have to do the analysis and figure out where you need to concentrate your efforts and where your market is overseas."
Murphy said some economists have even suggested that the reason we haven't hit a recession yet is because of the strong exporting work of many companies in the country. Local exporting success stories include Sippican, a marine technology company in Marion and the Lakeville/Middleboro-based Oceanspray.
Many southeastern Massachusetts companies are reaching overseas now more than ever because they are finding they can be competitive in markets that they were once priced out of, according to Tobias Stapleton, executive director of the International Trade Assistance Center in Fall River.
That's due to the weak dollar, he said.
"Take Europe for instance. For years, American companies were just priced out of that market, but for the last two years the weak dollar has caused these companies to now become more competitive," said Stapleton. "These were countries three to four years ago that were off our radar, but our dollar, especially against the Euro, has provided opportunities for these companies, especially small manufacturers who never focused their efforts on exporting before."
Stapleton said a majority of small and large southeastern Massachusetts businesses keep up with the times and the increasing exporting market. But for those who have not yet made the plunge into the exporting market, there's no better time then now.
"One thing I recommend is taking a look at your industry and what your competition is doing," said Stapleton. "Where are your overseas enquiries coming from and why?"
With the US market continuing to make a downturn, Stapleton said larger businesses will continue to grapple with a diminishing domestic market.
"Many of the small and medium size businesses don't have a full blown trade effort, but it's a great time for smaller companies to get a larger share of the pie because the big guys aren't there," Stapleton said. "They will need to focus their efforts in the global markets and establish themselves internationally to carve out that piece, but its there for the taking."