Maine exporters may be sleeping poorly these days, but it’s not the humid weather. Global markets have been shaken by the rising risk of a Greek exit from the eurozone and the ongoing rout in Chinese stocks. Meanwhile, Canada’s economy has contracted every month this year, and a growing number of economists say that Maine’s largest trade partner has already stumbled into a recession.
Simply put, people in other countries don’t buy as much Maine stuff when their currencies sink in value. They also don’t buy stuff if they lose their jobs or are worried about losing their jobs.
So far, though, this anxiety has yet to appear in Maine’s trade data with Europe.
The value of Maine’s exports to the eurozone – the 19 countries that have adopted the euro as their sole legal tender – is up 15 percent for the first five months of 2015 compared with the same period a year ago, according to data compiled by the Maine International Trade Center.
Exports to Italy are up 35 percent, from $20 million to $27 million, and exports to Germany are up 21 percent, from $17.8 million to $21.6 million. Exports are also up to United Kingdom (11 percent), Belgium (13 percent) and Poland (43 percent).
Exports to France increased 63 percent, from $3.6 million to $5.9 million.
Sales of Maine-made boats to Europe are up 71 percent over the same period last year, and sales of seafood – mostly lobster – is up by 40 percent.
So what’s going on?
WAITING TO SEE WHAT HAPPENS
Janine Bisaillon-Cary, president of the Maine International Trade Center, said she was surprised when she looked at the trade data because she has heard from a lot of exporters complaining about the declining buying power of the euro.
On Tuesday, the euro was worth just under $1.10 – down 30 cents from May 2014 and down 50 cents from the peak in July 2008.
But the lower euro hasn’t slowed the demand for Maine goods, at least for now.
“Everyone is waiting to see what happens with the Greek situation,” she said. “If there is a dramatic change, it will have a major impact on European exports.”
If the European economy flounders in the wake of the Greek crisis, exports of industrial components and commodities, like wood pulp, will likely not suffer much, she said. However, sales of products that are driven by consumer demand – such as lobster tails and sailing yachts – would tumble.
Bisaillon-Cary said she’s not worried about exports to Greece itself because its economy is relatively tiny. The value of Maine exports to Greece last year amounted to $600,000, placing the world’s oldest democracy behind 77 other nations in the dollar value of Maine exports.
EXPORTS TO CHINA AND CANADA SLIP
So far, exports to Asia are mixed.
Exports to China, Maine’s third-largest trading partner, fell 3 percent, from $82.3 million to $79.8 million. Exports to South Korea increased 35 percent, from $25.8 million to $35 million. Exports to Japan fell 27 percent to $34 million, continuing a downward slide that began several years ago.
By far, Maine exports more goods and commodities to Canada than any other nation. Exports to Canada for the first five months of 2015 fell 8 percent, from $444 million to $410 million.
The Canadian dollar is now worth 78 cents in U.S. currency, a decline of 26 percent in two years. The slide in the value of oil has been painful for Canada, where most new business investment and jobs have come from the oil-rich province of Alberta.
Canada will officially be in a recession if its gross domestic product declines in the second quarter. That would hurt not only Maine exporters but also Maine’s tourism industry and many retailers who for years have benefited from Canadians traveling here to buy cheaper goods, Bisaillon-Cary said.
THE DOMESTIC MARKET IS UP
On the upside, the United States economy continues to rebound, and the vast majority of Maine exporters also sell products in the domestic market, she said.
While a boost in domestic sales can make up for a slump in overseas markets, companies should not pull back on sales efforts abroad, she said. Some day, the U.S. economy will be in a slump, and companies will need those foreign customers again.
“You need to keep your toes in the overseas market,” she said. “You don’t know when those things flip.”
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