Some European economies are on the brink of collapse, but the region is still buying Tennessee products. Sales of Jack Daniel’s whiskey, medical equipment, and other goods are up eight percent from a year ago.
Tennessee companies sent close to a billion dollars worth of goods to Europe in the third quarter, that’s more than what was exported to China. MTSU’s Steven Livingston says while some European countries are having big problems, not all have gone down the drain.
“The Netherlands, Belgium, that area is still increasing imports from Tennessee, largely from the medical equipment sector. Scandinavia is still doing okay, and France is bucking the trend, purchasing more goods from Tennessee. So, that’s what’s made the export picture more resilient than it would be otherwise.”
But exports to Italy and Spain are down about 7 percent. Those are the two biggest European economies affected by rising public debts and shrinking government spending.
While the US has been mostly immune to fallout from the European crisis, Livingston warns that Tennessee could see some effects if things get worse.
“I think the biggest thing that’s going to hit Tennessee is if there’s a credit crunch in Europe and that causes banks elsewhere in the world to also pull back their lending. Then you’re going to see export problems all over the place.”
Even with the uncertain outlook, state leaders have announced incentives for Tennessee businesses to sell their products outside the US.
Tennessee Could Be Welcome Spot for European Investment
The state’s top business official says Tennessee could benefit from the economic uncertainty in Europe. Already, more than 60,000 Tennesseans work for European firms.
Over the past few years, the state has worked hard to recruit European companies like Volkswagen. Bill Hagerty heads the state’s department of Economic and Community Development. He says the state is going to be even more aggressive.
“The US is becoming an increasingly attractive place to do business on a relative basis. So what we’ve been doing is making sure Tennessee gets its disproportionate share of that movement and that activity.”
Hagerty says the ongoing crisis in Europe has many of the region’s companies looking elsewhere for growth. Livingston of MTSU cites one example.
“This doesn’t involve Tennessee, but I was just looking at something involving Fiat and North America is like the last part of the world where they have reasonable growth expectations. I think that might be similar to Volkswagen.”
And it’s not just Volkswagen itself. Many of its European suppliers have located to Tennessee. A Spanish sheet metal company has already announced plans to add more than 80 workers. Meanwhile, an Italian tire tread company in Madison has broken ground on a 10 million dollar expansion.