Home Archives February 2008 Weak dollar a mixed blessing

Weak dollar a mixed blessing

| Print |  Email
Friday, February 01, 2008

t_dollar sign 0980

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.

pdf

e-sources

Oregon's top 25 export industries by dollar amount, 2000-2005

• Oregon's top 25 export partners, 2000-2005, with ranking by percentage of total exports


• Oregon Economic and Community Development Department's analysis of Oregon's foreign exports between 2005 and 2006

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



Have an opinion? E-mail This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

More Articles

Managing family assets: The importance of planning ahead

News
Friday, August 22, 2014
Unknown-1BY CLIFF HOCKLEY |  OB GUEST CONTRIBUTOR

When business intersects with family, a host of  situations can arise. Without a clear vision and careful planning, hard-earned investments can become stressful burdens.


Read more...

Report Card

September 2014
Tuesday, August 26, 2014

Strong public schools shore up the economy, survey respondents say. But local schools demonstrate lackluster performance.


Read more...

Tight and Loose

September 2014
Wednesday, August 27, 2014
BY JENNIFER MARGULIS

As schools implement more rigorous academic standards, holistic and flexible approaches to K-12 education flourish.


Read more...

Constant Contact

October 2014
Thursday, September 25, 2014
BY AMY MILSHTEIN

To prevent burnout, companies are banning email and after-hours communications. But is the 24-hour workday here to stay?


Read more...

Video: The 100 Best Survey

News
Thursday, August 28, 2014

100-best-logo-2015 500pxw-1OB Research Editor Kim Moore shares some pointers about the 100 Best Companies to Work For survey.


Read more...

Buyer's Remorse

September 2014
Tuesday, August 26, 2014

Parents and students paying for college today are like homeowners who bought a house just before the housing bubble burst.


Read more...

100 Best Nonprofits to Work for in Oregon [VIDEO]

News
Thursday, October 02, 2014

Screen shot 2014-10-02 at 11.17.21 AMMore than 5,500 employees from 180 organizations throughout the state participated in the 100 Best Nonprofits to Work for in Oregon project.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS