The dollar’s decline is good news for Oregon’s traded sector companies.
The dollar’s steady decline in value over the past year might seem problematic for American trade. But for most Oregon industries, a weak dollar means a strong export economy.
“The fact that the dollar has been depreciating means Oregon products are more competitive in the world,” says state economist Josh Lehner. “It’s a tailwind for export opportunities.”
Export-focused industries — mining, manufacturing, forest products, and tourism —should pick up speed. If the dollar depreciates relative to the yen, for instance, a Japanese consumer can buy a cheaper American washing machine. A weaker dollar also makes travel to the U.S. more appealing.
That’s good news for Oregon. The state continues to be the largest wood products producer in the nation, and is seeing high growth in advanced manufacturing. Tourism injected $11.3 billion in direct travel spending into the Oregon economy in 2016, according to Travel Oregon data.
Oregon industries are less impacted by the dollar’s decline than their counterparts nationwide. The dollar has depreciated against Asian currencies less than against the Euro. Of Oregon’s top five international markets—China, Japan, Korea, Canada, and Malaysia—five are in Asia. Nearly half the trade volume to China and Malaysia comes from Intel alone.
“The fact that the dollar has been depreciating means Oregon products are more competitive in the world,” says state economist Josh Lehner. “It’s a tailwind for export opportunities.”
The major factor driving down the dollar, economists say, is strong global economic growth. “Stronger growth overseas is making investing in Europe and Asia more attractive,” says Mark Vitner, an economist at Wells Fargo, “and slightly lessened the flow of investment into the U.S.”
Amid Trump’s recent announcement of tariffs on solar, steel and aluminum imports, along with the looming threat of a trade war, Oregon’s traded sector companies have plenty of challenges to navigate. But a weakening dollar isn’t one of them.
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