{"id":7446,"date":"2012-04-12T10:00:18","date_gmt":"2012-04-12T14:00:18","guid":{"rendered":"http:\/\/stateimpact.npr.org\/new-hampshire\/?p=7446"},"modified":"2013-07-29T22:54:58","modified_gmt":"2013-07-30T02:54:58","slug":"why-the-eurozone-crisis-matters-to-new-hampshires-economy","status":"publish","type":"post","link":"https:\/\/stateimpact.npr.org\/new-hampshire\/2012\/04\/12\/why-the-eurozone-crisis-matters-to-new-hampshires-economy\/","title":{"rendered":"Why The Eurozone Crisis Matters To New Hampshire’s Economy"},"content":{"rendered":"
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Aris Messinis \/ AFP\/Getty Images<\/p>

The sovereign debt crisis has hurt the European economy and sparked unrest across the continent<\/p><\/div>\n

To people not directly involved in fixing, analyzing, or monitoring the Eurozone crisis<\/a>, it can take on the character of black magic.\u00a0 And it’s easy to think that the dark arts of the European Central Bank’s low-interest lending initiatives, national bond auctions, and bailout talk have little bearing on our daily lives.<\/p>\n

In fact, they very much matter.<\/p>\n

Economists say Europe’s ongoing sovereign debt difficulties could very well plunge the continent into a double-dip recession, if it hasn’t already<\/a>.\u00a0 And, as America’s recent history demonstrates, when the economy’s on the downswing, not many people are anxious to buy anything.\u00a0 Those jitters ultimately hit the export economy…and when orders slow down, so does demand for workers to make the stuff we ship overseas.\u00a0 Although tiny New Hampshire isn’t exactly a Rustbelt-style manufacturing<\/a> powerhouse, the state makes a lot of advanced, high-demand products, which means it’s heavily exposed to what’s going on in Europe.<\/p>\n

NH’s Export Economy Exposed<\/h3>\n

A big part of New Hampshire’s edge in the world export market is tied to what is made here. Last year, Mexico was the Granite State’s top trading partner, buying more than $943 million in product, with Canada in the #2 spot with $648 million, followed by China.\u00a0 Germany and the UK round out the Top 5, with the Netherlands and France among New Hampshire’s Top 10 trading partners.<\/p>\n

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Amanda Loder \/ StateImpact New Hampshire<\/p>

Economist Evangelos Simos explains how the Eurozone crisis affects NH exports<\/p><\/div>\n

The problem, however, is that more than 18 percent of New Hampshire’s exports are Europe-bound. That works out to a little less than one-out-of-five exports exposed to the volatile economic situation across the pond.<\/p>\n

At a recent presentation sponsored by the Business and Industry Association<\/a>, University of New Hampshire economist Evangelos Simos<\/a> pointed toward a densely packed, brightly colored bar graph on a PowerPoint presentation.\u00a0 While overall it seemed to indicate a growth pattern, if you squinted toward the very last bar, representing the latest stats from January 2012, you could see a steep drop.<\/p>\n

“[We’re down to] levels equal to the previous recession a few years ago.\u00a0 Levels that we observed in ’05 and ’06, that’s where we are right now, in January of 2012,” Simos said.\u00a0 “So our state economy, it seems, has fallen a lot.\u00a0 And since one-fifth of our exports go to Europe, we can obviously conclude, in general terms, that that’s a major source of decline in our exports.”<\/p>\n

That change over the course of a month reflects the downward trend in New Hampshire’s overall exports last year.\u00a0 The Department of Resources and Economic Development reports that overseas sales in 2011 were down by nearly 1.7 percent from the year before.\u00a0 A news release from DRED, however, noted that 2010 was a “record year” and the 2011 decline “was less than we anticipated.”<\/p>\n

In other words, New Hampshire is exposed to the Eurozone, and already feeling the effects.\u00a0 Last year, the state saw a slight downward trend in overseas sales, which was more pronounced in January of this year.\u00a0 The key question is, to what degree could New Hampshire’s export economy be hit in the long-term?<\/p>\n

An Exporter’s Story<\/h3>\n

You may not have head of David Greer’s company–Wire Belt Company of America<\/a>, based in Londonderry.\u00a0 But you’ve likely seen its products all over the place.\u00a0 “We manufacture wire mesh conveyor belting that’s used in food processing equipment as well as all other types of manufacturing processes,” Greer said.\u00a0 “Most people would notice our belt in a Pizza Hut<\/a>, or a toaster over in D’Angelo’s<\/a> or Dunkin’ Donuts<\/a>.\u00a0 We’re a little niche industry, but it treats us well.”<\/p>\n

The small manufacturing company owns other small manufacturers in Europe. Thirty-five people are in Germany, 65 in England and another 100 employees are based in New Hampshire. “All I can say is what I see and what I hear on my visits to my small company,” Greer said.<\/p>\n

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mammal \/ Flickr<\/p>

David Greer has to navigate three currency markets in his business: dollars, pounds, and euros<\/p><\/div>\n

An outsider looking in might be tempted to call Greer’s corporate setup “quirky.”\u00a0 While his three companies are stand-alone entities, he owns them all, so what happens in Germany and the UK affects his bottom-line in New Hampshire.\u00a0 The three companies also divide the world into “territories,” with New Hampshire’s Wire Belt focusing mainly on North and South America.\u00a0 The UK facility handles the bulk of European markets along with India and China.\u00a0 But all three companies make different products, so they also export to each other.<\/p>\n

In short, Greer’s ventures are highly diversified, if intricately connected.\u00a0 He says the set-up offers him some insulation from Eurozone volatility.\u00a0 But it also makes planning for the future incredibly difficult.<\/p>\n

“We did our budgets this year, and we look at each other and say, ‘Ok, how do we plan?'” Greer said.\u00a0 “And we planned for business to get a little bit worse this year versus last year.\u00a0 Last year business was very good, for all three companies.\u00a0 But the talk in England is already, it’s not if<\/em> there’s a double-dip.\u00a0 What I have heard is they’re in <\/em>the second recession.\u00a0 It’s just not strong in England, and Germany is still doing well, but the cracks are there.”<\/p>\n

Those cracks are manifesting in some interesting rumors that can be tough to verify across a wide stretch of ocean.\u00a0 When we first spoke with Greer, Germany had not agreed to yet another Greek bailout<\/a>, which would once again save the euro.\u00a0 “It makes us nervous,” he said.<\/p>\n

State Help For A Global Problem?<\/h3>\n

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