Weak Dollar Boosts MA Exports
By Curt Nickisch
WBUR, National Public Radio
BOSTON, Mass. – March 13, 2008 – As a recession appears increasingly likely nationally, Massachusetts businesses are battening down to wait out the storm.
But more than 8,000 companies in the state are seeing some sunshine. That’s because they export products and services to foreign markets.
As WBUR’s Curt Nickisch reports, with the dollar at historic lows, some are selling more than ever.
TEXT OF STORY:
CURT NICKISCH: In a seafood processing plant in New Bedford, a conveyor belt is dropping the meaty tails of monkfish — about three pounds each – into a tub of disinfectant.
SOUND OF FISH SPLASHING INTO TUB
Walt Barrett, the general manager of this plant, is watching workers clean and pack the monkfish on ice in Styrofoam crates.
WALT BARRETT: These are going to go to our freight forwarder in Lynn and then will be shipped out of Logan airport later this afternoon. These are being shipped to the Netherlands, to Amsterdam.
NICKISCH: Today’s other orders for Seatrade — that’s the company that owns this plant – are going to France and Russia. It’s Barrett’s job to figure how to combine the shipments to save on freight costs.
NICKISCH: So you do that math.
NICKISCH: And have you been doing a lot of currency conversion lately too?
BARRETT: They sure do in Europe when they look at our price here, and then they put it into Euros. They sort of like what they’re seeing right now.
NICKISCH: They like what they’re seeing, because the value of the dollar has been dropping hard. It’s fallen five percent against the Euro already this year — to a record low. That makes seafood priced in dollars relatively cheap for Europeans. Barrett says foreign demand is rising just in time, because US restaurants are now buying less fish in a weaker economy here.
BARRETT: The export market is a more significant part of our total business now.
NICKISCH: Seafood is not the only Massachusetts industry getting a boost from exports. Take Hydrocision, a medical device company in Billerica. Sandy von Stackelberg heads the company’s international sales and just negotiated a new deal. The foreign distributor asked for a twenty-five percent discount. To which von Stackelberg replied the dollar alone has fallen twenty-five percent in just over two years.
SANDY VON STACKELBERG: Sort of stopped him in his tracks. And I think he then sort of recalculated everything else he was going to buy and decided to buy more!
NICKISCH: Statewide, exports have risen an average of ten percent a year over the last four years. Paula Murphy heads the state government office that helps companies sell their stuff abroad. Lately, she’s been getting call after call from companies wanting to cash in on the weak currency. But Murphy says it might be too late.
PAULA MURPHY: Exporting is definitely a long term venture. If you’re going to begin looking into selling overseas for the first time or even getting into a new country for the first time, you’re looking at a lead time of one to two years before you’re going to start to see any sort of significant return on that effort.
NICKISCH: But those companies that got into exporting a few years back are seeing the payoff now. One of them is Health Enterprises in North Attleboro. The manufacturer sells low-tech products to pharmacies.
BROOKE FISHBACK: Plastic pillboxes and organizers, pill splitters, hot and cold therapy bracelets, finger splints, travel bands and earplugs.
NICKISCH: International sales manager Brooke Fishback says his company is selling three times as much of those items overseas than it did just three years ago. Still, Health Enterprises is not raking in export profits as much as other companies, because the fuel costs for such high volume shipping have been going up. So Fishback says the dollar’s decline has basically cancelled that out.
FISHBACK: More or less. The reality is when someone purchases our products, their concern is not what we say the price is, but what it is for them to bring it into their warehouse facility in the country where they do business.
NICKISCH: Overseas sales now make up twenty percent of Health Enterprises’ business, helping diversify risk as the domestic economy turns sour.
So in seafood, high-tech, and even low-end manufacturing, exports driven by the weak dollar are throwing Massachusetts companies a life raft.
In all, the US Commerce Department says about six percent of private sector workers in Massachusetts have exports to thank for their salaries.
For WBUR, I’m Curt Nickisch.
Weak Dollar Boosts MA Exports