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Irish Crisis Could Directly Effect Indiana

November 17, 2010

Last week, I wrote that the Eurozone, despite the its recent economic crises, could be an engine of growth for Indiana.  (Is the Eurozone an Engine of Growth for Indiana?)  Since then, the third quarter export data for Indiana has been released, and as the below graph shows, Indiana’s exports to Europe are booming.  Despite three months remaining in the year, the Hoosier State is already within $250 million of last year’s export levels to the Eurozone.

However, with this trend continue despite the recent worries in Europe about the state of some of its economies?  For instance, Greece bought only $22.1 million worth of Indiana goods in 2008, and that was the highest level of exports in the last three years.  Indiana has a history of exporting to Portugal, but trade has declined from $109 million in 2007 to $37 million in 2009.  While this is a significant decline of 68%, Portugal still accounted for only 2.5% of Indiana’s exports to the Eurozone in 2007.

Indiana does have large international ties with Ireland though.  In 2009, $443 million worth of Hoosier goods went to Ireland, accounting for 9.4% of Indiana’s exports to the Eurozone and making the Gaelic Tiger the sixth largest European destination for Indiana.  (2009 a mixed picture for Indiana’s exports to Western Europe)  For 2010, it appears that Ireland’s woes are starting to affect its imports, as Indiana’s exports to it have declined by ten percent compared to the same time last year.  More information about Indiana’s ties to Ireland can be found in a recent article by the Indiana Business Research Center.

If Ireland is forced to seek a bailout and as a result unable to buy more Hoosier goods, then the Irish debt crisis will have a direct effect on Indiana.

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