FEBRUARY 2008: AROUND THE STATE
Weak dollar a mixed blessing
STATEWIDE
There’s a basic rule of thumb when it comes to U.S.
industries and a weak dollar: Exporters benefit (their goods
are cheaper for other countries to buy), and importers suffer
(they pay more for foreign goods).
For Oregon, where exports grew 24% between 2005 and 2006 to
$15.3 billion, that should be a good thing. But it’s not
that simple. Nor is it a simple question whether the weak
dollar — down nearly 11% over 2007 and predicted to drop
even further this year — is helping or hurting
Oregon.
Some of the state’s top export industries are riding
high. Agriculture products, which make up 10% of the
state’s exports, are doing extremely well, says
Department of Agriculture spokesperson Bruce Pokarney.
“We ship about 40% to the international market.
It’s very significant,” he says. The metals and
software industries are also strong, according to anecdotal
accounts by industry groups.
But exports by the computer and electronic product industries
— 40% of the state’s exports — are flat, says
state economist Tom Potiowsky. Forest products and
transportation manufacturing exporters aren’t benefiting
either.
One reason is that no company only imports or exports; the
ratio between the two could hurt even the largest exporter.
Further complicating the question, says Randall Pozdena —
senior economist at ECONorthwest and former vice president of
the Federal Reserve Bank of San Francisco — are things
such as industry regulations that limit quick response to
market conditions, or China’s growth and its impact on
manufacturing around the world.
So what does the weak dollar mean for Oregon? There are myriad
economic forces and factors at play, making it nearly
impossible to say what the weak currency will do.
Pozdena offers one possibility: When the traded-goods sector
booms, it pulls resources, like employees, from the non-traded
sectors with potentially broad impacts across industries, like
job loss. “If you happen to live in an economic community
that’s heavily construction-oriented, the sucking sound
will be even stronger,” he says.
Potiowsky maintains that, as a whole, the weak dollar
isn’t a bad thing. It’s a result of the dollar
correcting itself after being at high levels for a long time,
he says. “And without us having to do anything,
it’s almost like having a productivity
gain.”
ABRAHAM HYATT
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