Boom time for small exporters
Quality float works has always exported some of its floating metal balls, which find their way into a variety of industrial processes that require pumps and valves. But thanks to the falling U.S. dollar, business is really taking off for the 21-employee Schaumburg (Ill.) company. Orders from customers overseas are up, with export sales for the $2.3 million business jumping to 26% from 3% of total revenues since the beginning of 2003. "Companies have contacted us from Europe because we can be competitive against their local suppliers, all due to the drop in the dollar," says Sandra Westlund-Deenihan, Quality Float Works' president and design engineer.
The dollar has been dipping for the past two years, and as of late November was trading at historic lows of 1.48 euros and about 107 yen. That's been a boon to small companies that export or produce and sell overseas, and a bright spot in an economic picture clouded by record oil prices, a widening trade gap, the subprime mortgage mess, and China's hinting that it might diversify its currency holdings away from dollars. Exports have grown steadily this year and rose at a 23% annualized rate in the third quarter, according to the National Association of Manufacturers, a Washington trade group. "This is the fastest pace in more than a decade," says Hank Cox, an NAM spokesman. "We are seeing a significant shift in the trade picture as exports are rising at a much faster rates than imports."
Of course, importers and small companies that manufacture overseas and sell back home may not be so lucky. "If you are a U.S. manufacturer manufacturing in Europe, but selling back to U.S. customers, your products are more expensive," says Tim Hanley, vice-chairman and U.S. process and industrial products leader for Deloitte & Touche in New York. Such companies, says Hanley, may want to think about selling directly to overseas markets.
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