Expanding Connecticut’s Export Horizons
At the Governor’s Economic Summit this fall, Moody’s expert Steve Cochrane said that Connecticut’s exports are a source of economic strength … but maybe a tad too dependent on Europe.
With a shaky Eurozone, Cochrane and many others are concerned about how a recessionary crisis there could impact the United States. In fact, says a new study by Wells Fargo:
“While the effect of a European recession might be relatively modest on the U.S. economy as a whole, there are a handful of states that may be more vulnerable.”
Specifically, states with the highest export exposure to Europe–and count Connecticut in that group.
We rank fifth-highest in the U.S. for European exports as a percent of GDP (at 2.96%). And that could present a problem, because:
“Slower demand from the Eurozone will likely slow production among [U.S.] commodity, aircraft and automobile producers … “
While a major event could seriously affect Connecticut’s exports, the state could avoid a “Eurozone shock”—and boost our economy—by widening the playing field for potential export markets, said Cochrane.
As Bloomberg reported this week, U.S. exports continue to grow, but “Developing markets now account for 55% of U.S. goods shipments, … up from 40% in 2000.”
With the widening of the Panama Canal—doubling its capacity by 2014– seaports other than the Port of New York will be able to play a larger role in accepting larger Asian trade cargo vessels.
Connecticut needs to take advantage of opportunities like that to reach other, emerging markets. In order to do that, we have to improve our transportation infrastructure. Ideally, upgrading our seaports and airports would unlock more trading-partner potential.
With limited state and federal dollars available, Connecticut policymakers will have to make tough strategic choices.
However, the benefits of maximizing Connecticut’s proven export strength could, and should, make some of those choices easier.
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