“We in New England have always been part of the Atlantic economy,” said André Mayer with the organization, Associated Industries of Massachusetts.
The “Atlantic Economy” trades a lot of high-tech gadgets back and forth: computers and electronics, aviation equipment and pharmaceutical devices.
It’s not just trade. Mayer pointed out that Europe is also heavily invested in New England companies: major banks in New England are European owned, the supermarket, Stop and Shop, is Dutch owned. And European companies have started buying up Boston-area biotechs.
“And as a result, we are more sensitively affected by events in Europe than the country as a whole,” said Mayer. “If there’s a financial meltdown and the euro collapses, and all that, everybody is going to feel it. But if Europe avoids that and has only a mild recession, most of the US won’t feel that much at all. But we’ll feel it much more strongly here.”
The question is: How strongly? It’s hard to say. Trade statistics provide a good big-picture snapshot, but can’t tell you everything. And the latest data are a few months old.
I called several companies with deep European connections to try and see how things are going right now, but I couldn’t get much information. André Mayer wasn’t surprised to hear this.
“One of the issues is that companies are much more ready to talk about good news then bad news. And if we’re looking at a slowdown, they shy off from talking about it,” said Mayer, who also suggested heading over to a major biotech conference taking place in Boston to try and meet some local companies that work with Europe. (Massachusetts has more than 800 life science companies, and more than 160 in Cambridge alone.)
I spent a morning at the Bio International Convention, wandering around, trying to speak with local companies about how the European economy is affecting them. I basically got blown off.
“I wish the head of our business was here. I’m really not the right person to do that. Could you come back?” one woman told me, which is pretty much what I heard all morning.
One person did have some time to speak with me, Mike Sullivan. He’s vice president of operations for a small company, Maine Biotechnology Services. The company, which manufacturers monoclonal antibodies, is based in Portland, but they have clients throughout the world. I asked him how the economic crisis in Europe is affecting his company. He said it’s slowing down research and development.
“It has kind of paused people and that has kind of delayed projects,” said Sullivan.
Still, Sullivan said those delays from European customers have had only a minimal impact on the company’s bottom-line. He said they haven’t had layoffs or anything like that.
“The impact of the European economy slowing down, I think for us, it’s always a little bit subservient to the US,” he said.
New England states might rely heavily on European trade, but that trade still only accounts for a fraction of the region’s overall economic activity. (In Massachusetts and Connecticut, trade with Europe accounts for roughly 2.5 percent of the state domestic product, according to Census Bureau data.)
Still, economist Ross Gittell, vice president and forecast manager for the New England Economic Partnership, said a weakened Europe makes it harder for the regional economy to get going and gain some traction. And Gittell said there’s not much that can be done about Europe’s problems from over here.
“I don’t think there’s anything any one individual company could do or one individual state could do. It’s even questionable what the US or President Obama could do to really affect the European economy,” said Gittell. “A lot of the firms in New England that do have significant exports are just tracking those markets trying to diversify into growing areas, maybe into Brazil and stronger economies that are outside Europe.”
Companies across the nation are doing just that. But it’s trickier here in New England.
“The stuff we make tends to be very expensive,” said André Mayer. “It’s high-end, state-of-the-art stuff. Otherwise you can’t compete, you can’t compete manufacturing commodity product here in New England; it can be done cheaper in South Carolina, or Texas, or Malaysia, or wherever. So, our markets have been places with money.”
Namely, places like Europe.