American companies profit from weak dollar.

The weak dollar is giving exporting companies an advantage. Especially the construction business is doing good. The American export is actually rising like never before, in August there was a record of 138.3 billion exported goods and services. The main reason for this bloming export is the low-rated dollar. But the healthy economies of Asia and Europe are helping too, they are importing more American goods. David Huether, head of the ecomical department of the National Association of Manufacturers, says that every sector is profitting from the growing export. The biggest winners are manufacturers of capital goods, like Boeing, telecommunication sector, nutrition sector,... .
Manufacturers of furniture had to move their plants to the cheaper China and Canada in the last years. Canada had the big advantage of her big wood supplies and the cheap Canadian dollar. Now the American furniture sector is looking to move back to its base. There is now more advantage of producing in Canada, last month the Canadian dollar was even worth as much as the American dollar.
Due to this balance Disney even started advertising in Canada, in order to get the Canadians to come to its theme parks. The low dollar is even helping to compensate the trouble in the housing market. But we should be carefull, if the dollar drops to much or to fast, the import will drop too. This will have its effect on foreign economies and eventually also on the American economy. If the dollar drops to much, there will also be inflation problems.

I think the question remains, how far can you lower the dollar. At which point will the import drop? Because it's true that the foreign economies suffer from the low dollar. Especially the 'new' economies, who depend mostly on import. Autartical economies like Europe can rely on their own industry, devolloping countries can't do such a thing.
At the other hand we can't forget that this again proves the economical cycle. America will benefit for a while, until the import drops. Then Europe will suffer from decreasing export. Then again European import will drop and America will suffer from a weak export. And so on.... .


Thomas

source: http://www.tijd.be/nieuws/economie_financien/artikel.asp?Id=3321229