California’s European Exposure

According to Milken Institute research, California is significantly less exposed to potential fallout from a European recession than many other states.

  • A 10% decline in U.S. exports to the European Union would only slow GDP growth by 0.2%
  • Utah and South Carolina are the most vulnerable states with exports to the European Union equaling  4.2% and 3.5% of their state GDPs respectively.
  • South Carolina’s has significant auto production connections to the European Union.
  • Europe is a significant importer of Utah gold.
  • Made-in-California exports to the European Union comprise only 16% of the state’s total exports and equal less than 1.5% of its GDP.
  • California exports could also be affected indirectly if European financial disruptions slowed growth of BRIC economies.t

(Read the article)

The Golden State is more sensitive to North American and Pacific Rim economies.

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One response to “California’s European Exposure

  1. The last point, California’s exposure to the BRIC economies is an important one. China is California’s second largest export market. Aside from food, the exports are capital goods, intermediate goods and raw materials for Chinese factories. Europe is China’s largest foreign market. A sharp contraction in the Euro Zone could impact California in a much larger way than just California’s exposure to Euro Zone exports through this channel.

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