Brexit could hurt York export market
- The UK's decision to leave the European Union caused the pound and euro to drop in value against the dollar.
- Dollar's increased value could hurt local exporters, who sent $535 million in goods to EU in 2014.
Unless they're in the import/export business, average York County residents probably won't feel much of an effect from the United Kingdom's historic vote Thursday to leave the European Union, according to local economy watchers.
The UK's vote triggered an immediate drop in value of the pound — British currency — to its lowest level since 1985, according to an Associated Press report, and the euro also fell against the value of the dollar, which local officials said could hurt manufacturers exporting to the UK and other European Union countries.
Before the vote was final, Tom Palisin, executive director of the Manufacturing Association of South Central Pennsylvania, said he had talked to several members about the potential impact locally, but he didn't think it would have much impact.
Tina Weyant, executive director of the World Trade Center of South Central Pennsylvania, said the European Union is a major trading partner for companies in this area and the move would definitely pose challenges to current exporters.
Local impact: Several companies with facilities in York County also have locations in the UK, including Glatfelter, Voith and Dentsply.
Glatfelter spokesman William Yanavitch wrote in an email that the company has two mills in the UK, and both are working "diligently and safely" to meet demand in light of the vote.
"We will continue to monitor the evolving situation but see no significant impact on our operations in the near term," Yanavitch wrote.
Voith spokeswoman Sheryl Zapcic wrote in an email that the company noted in its half-year report about the high probability of negative effects on the European economy from the vote.
"At the moment, it’s hard to say how these effects will evolve in detail, as much will depend on the implementation of the Brexit process and the effective economic regulations between the European Union and the United Kingdom," she wrote.
Companies in the York-Hanover area exported more than $535 million in goods to European Union countries in 2014, according to International Trade Administration data.
An estimated 173,000 jobs in Pennsylvania were supported by manufactured exports to European Union countries in 2014, according to the administration, which places the state 10th nationally in that statistic.
According to census data, Pennsylvania exported $2.3 billion in goods in 2015 specifically to the UK, which ranked behind just Canada and Mexico.
Damien Lynch, financial adviser at York Township's Financial Advisory Group, said American products exported to the UK will now be more expensive for British citizens to purchase.
Benefits? On the opposite end of the spectrum, products imported to the U.S. from those countries will now be cheaper for American citizens to purchase, Lynch said.
Pennsylvania imported $2.5 billion in goods from the UK during 2015, according to census data.
Lynch also noted that travel to Britain would be cheaper Friday than it would have been Thursday.
Aside from exporters, though, Lynch said the vote should have very minimal impact on American citizens.
The Federal Reserve will likely further delay raising the interest rate, and the stock market will experience some volatility because of the uncertainty, but Lynch said he expects that to dissipate within one to three months.
Lynch's only worry, he said, was if Britain's decision would have a ripple effect.
"If this spreads, that's when this might really start affecting us," Lynch said, referring to reports of Scotland potentially voting to leave the UK and other countries voting to leave the European Union.
Lynch said he was shocked UK voters chose to leave the European Union, but he said many of his clients, despite him talking about the Brexit for months, were unaware of the result when they called him Friday morning.
"People are much more focused on our election, but I told them (the Brexit vote) would be more important in the long run," he said. "Our election happens once every four years. This was a once-in-a-lifetime vote."