A new study from Wells Fargo Securities Economics Group lists Washington state as among the states potentially most vulnerable to a further economic downturn in Europe.
But the nature of Washington’s European exports, mostly Boeing-built airliners, makes this state less likely to suffer in a decline than other states whose European trade is comprised of less exotic commodities. Some 71 percent of the value of Washington’s trade with Europe is jetliners.
European exports from Washington amount to 3.5 percent of the state’s gross domestic product, one of the highest in the country, but the economists as Wells Fargo think that even if European airlines cut back on orders, demand from other countries is likely to fill the gap.
“Overall, exports from Washington through the first five months of 2012 are up 29 percent over 2011, which is stronger than the 14 percent gain reported for the same period last year,” Wells Fargo said. “While shipments to the Eurozone have clearly slowed, exports to the Middle East, Indian subcontinent and Pacific Rim have more than made up for the shortfall.”
Other states with relatively high European exports are likely to suffer more severely if the European economy tanks. West Virginia, for instance, exports large quantities of chemicals to Europe. If manufacturing slows on the continent, the demand for imported chemicals will likely fall.
South Carolina’s European-owned auto factories could see exports to the Eurozone fall as residents bought fewer cars.
The same holds true for Alabama where a number of foreign automakers have set up shop.