Despite the lingering effects of a global pandemic and the Trump administration’s trade wars, foreign markets and foreign business investment remain a vital part of NH’s economy. In fact, the latest report on the globalization of NH prepared by researchers at Plymouth State University (PSU) shows that NH is ready to attract more foreign investment.
The pandemic has exposed high risks to the global supply chain and as companies seek to minimize those risks, they are investing in areas where the supply chain is more regionalized. New Hampshire is well positioned to be the gateway to the East Coast for foreign businesses, according to the 2020 report released in January by PSU business professors Roxana Wright, DBA, and Chen Wu, Ph.D., in building on 2018 and 2019 PSU studies.
The report found that foreign direct investment (FDI) has been declining nationwide since 2016 and was exacerbated in 2019 and 2020 when trade disputes and the pandemic drove down US exports and imports and disrupted US exports and imports. supply chains. As a result, Wright says, NH companies have made supply chain resilience a top priority. “A quarter of the activities were focused on the supply chain. Obviously, the companies were trying to build a stronger supply chain, ”says Wright of NH’s corporate activity in 2020.
“We saw this as a positive sign that New Hampshire businesses were taking action to build resilience. “
Brian Ward, vice president of sales and marketing at Jewell Instruments in Manchester (pictured), a manufacturer of sensors and controls, meters and avionics, and industrial test equipment, says trade wars have had a greater effect on its supply chain than COVID-19. “In fact, we had to work with our suppliers on pricing the way we contracted out because pricing became a reality,” he says. “We were able to fix all of these issues, as well as COVID, and now have a really resilient supply chain. “
New Hampshire’s proximity to Canada, as well as the presence of manufacturing, high-tech and foreign companies in New Hampshire and neighboring New England states, should allow Granite State to ” benefit from regionalization, as more and more companies aim to increase the resilience of their supply chains and limit the high cost of disruption, ”the report said.
“We anticipate some regionalization and redundancy in the supply chain. Even in our 2018 report, we found that foreign companies liked being among other foreign companies, and New Hampshire has a good presence, ”Wright said. “Much of the activity in 2020 came from Canadian companies. We anticipate that Canadian businesses will continue to view New Hampshire as an easy way to access the market. We don’t think it will slow down, but rather that it will increase.
Regionalization has given Canadian businesses an advantage in accessing export opportunities, says Wu. “You can see that Canadian businesses, by reaching New Hampshire and collaborating with local businesses, have increased their exports to the United States. United and had better access to foreign markets. “
While US trade fell in the first half of 2020, the good news is that it “rebounded from the third quarter due to global efforts to reopen economies.” And NH followed suit. The report says that after a sharp contraction in the second quarter of 2020, the economy of Granite State grew in the third quarter at a pace that ranked eighth nationally.
“We weren’t expecting a lot of activity in 2020 with so many businesses closed. We were a little pleasantly surprised that foreign trade activity is still strong, ”says Wright.
New Hampshire entered the pandemic with a strong portfolio of investment and economic activity of foreign companies, with mergers and acquisitions, new establishments and business expansions increasing from 2016 to 2019, the report notes. In 2019, NH exported 9.8% more goods compared to 2018, reaching $ 5.8 billion in export value after four consecutive years of growth.
Wu says that although NH exports fell 7%, the dollar value for 2020 was still higher than in 2018 and close to the record amount of 2019.
Even with the decline in overall business activity in 2020, foreign companies continued to invest in NH, particularly in the electronics, information technology and financial services sectors as well as some activities in the energy and life sciences sectors. This included 25 “remarkable” investment and expansion projects initiated by or involving foreign companies, including five acquisitions valued at more than $ 100 million, according to the report. “(Most) of New Hampshire’s foreign companies are in financial services, an industry that has been less affected by the pandemic than other traditional industries,” Wu said.
Some of the NH companies that have actually grown during the pandemic due to overseas markets include Foxx Life Sciences and Jewell Instruments. Foxx Life Sciences is a manufacturer of bioprocess pharmaceuticals and research laboratory equipment. Its head office is located in NH, with facilities in Salem and Londonderry, but sells to customers in 35 countries and has partnerships in India and China, said Tom Taylor, president and CEO. “Recently, we added a manufacturing distribution center in India to better supply all of our Asian customers,” he says.
Taylor says Foxx has grown 40% per year for eight of the past nine years. “We were very worried that we wouldn’t be able to achieve that 40% growth,” Taylor says. “Our pharmaceutical and biotechnology business has performed extremely well, especially with vaccines, but our laboratory business is down by around 30%.” He says the company quickly pivoted and produced more than half a million COVID-19 test kits and hit its revenue target on December 30.
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