“Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning.” – Albert Einstein
What does a strong dollar have to do with your local business retention and expansion strategy and your efforts to recruit manufacturing to your community? What actions should economic developers take in response to this moment?
The dollar is the strongest it has ever been compared to other currencies. This should inform your economic development playbook for the near-terms in the following ways.
- Create an additional sense of purpose when calling on your manufacturing sector. While it is likely that your manufacturing sector’s imported goods cost less, assuming their supply chains are working, it is also likely that the strong dollar is causing their U.S.-made products to be more expensive than their foreign counterparts. If a large part of their customer base is outside the U.S., this may hamper their ability to grow.
- If your community relies on your tourism sector, including foreign visitors, you may need to consider how to diversify the types of conferences you are recruiting to your market. Over the last several months U.S. citizens have been traveling the globe more to take advantage of the relatively low cost of international travel. This has impacted local tourism assets and our own hospitality sector and it is likely to stay that way for the foreseeable future.
- Look to the corresponding trends in the market, including the increase in manufacturing investment in the United States by both foreign and domestic companies based on the relative risks in Europe and Asia. The manufacturing plants being built right now will likely become our biggest exporters in the future. A common refrain is to “make it here, and sell it everywhere.” It is a sound strategy since 95% of the global market lies outside of the United States. If the dollar stays this high over the long-term, it will make it that much harder to execute.
These are all strategies that you are already executing, but let this serve as a reminder that global trends have local implications. Constantly stress-testing your local efforts in this rapidly changing world is a must for the best economic development teams.
Let’s lift each other up this week and move forward together.
Related reading:
Wall Street Journal | Strong Dollar Pressures U.S. Manufacturing Rebound
Travel Weekly | Strong Dollar Helped Fuel Interest in Europe
Investopedia | Pros and Cons of the Strong Dollar
Forbes | Strong Dollar
-Kenny McDonald