Despite falling dollar, N.H. exports to Canada grow slowly
High gasoline prices, costly travel accommodations and the cyclical lag of business as it tries to catch up with the currency market may all be contributing to the slow rise in exports from New Hampshire to Canada despite the weakening U.S. dollar.
In 2006, $598 million worth of exports crossed the border into Canada – 21 percent of New Hampshire’s total exports for the year. That was a 5.45 percent increase over the previous year.
Despite the weakening U.S. dollar, however, New Hampshire exports into Canada rose by only 2.3 percent as of July 2007, according to Karen Wyman, international trade specialist with the New Hampshire International Trade and Resource Center.
Rising export rates to other countries – exports to China and Germany increased by 22 and 23 percent, respectively – have led to speculation over why New Hampshire’s No. 1 export partner may be looking elsewhere for products.
One possibility is that international currency rates make other markets appealing to Canadian buyers, according to Rob Barry, export finance officer at the ITRC.
“Because the Canadian dollar is strong they have other places to make their purchases,” said Barry.
With most New Hampshire products traveling to Canada via truck, high gas prices also may in part be to blame for the slow climb of exports to that country. Additionally, the cost of overnight accommodations in Canada are higher than many business travelers are accustomed to paying in the United States.
“It’s important for businesspeople to travel to Canada, and $200-a-night hotel rooms may be hindering many companies and their businesses,” Wyman said.
It’s also possible, said Wyman, that time may be the simple reason Granite State exporters have yet to see a big increase in the amount of products their shipping to Canada.
“Typically the business cycle lags behind the currency exchange rate,” Wyman said. “It’s most likely we will see an increase in exports to Canada at some point. It’s just hard to say when.”