Foreign Markets Bolster Inland Economy
by Dave Wilkins
Capital Press, January 13, 2011
Business leader urges state lawmakers to hold line on corporate taxes
BOISE -- With the domestic economy still in sleep mode, export markets and direct foreign investment could help revitalize Idaho's economy, state and industry officials said.
Foreign markets have always been crucial to Northwest agriculture, and that has probably never been more evident than during the current economic downturn. With domestic demand stagnant or declining, exports to developing countries have helped to buoy Idaho's food processing sector, said Alex LaBeau, president of the Idaho Association of Commerce and Industry.
Developing markets are trending out of the global recession very quickly, he said during a Jan. 7 presentation to a joint legislative committee.
"It's the developed markets like the United States that are the ones recovering ever so slowly," LaBeau told the economic outlook and revenue assessment committee.
The association is comprised mostly of food processors and other manufacturers.
Confidence has recently improved a little among association members, LaBeau said.
"Things are not as bad as they were a year ago," he said.
Companies that had been hoarding cash are beginning to invest again, he said. Global credit markets have started to loosen up a bit.
"If that trend continues, that's a very positive sign for additional investment into Idaho," he said.
But the economy still has a long way to go to get back up to full speed, LaBeau said.
He implored Idaho lawmakers to keep a lid on corporate tax rates, even though they'll be under pressure this year to raise some taxes, slash spending or both.
Exports will likely play a big role in the Idaho ag sector again this year.
Agricultural products -- both commodities and processed food -- accounted for 25 percent of all Idaho exports in 2009, said John Hammel, dean of the University of Idaho College of Agricultural and Life Sciences.
It's not just foreign consumers who are helping to bolster Idaho's economy, officials said. It's also foreign investment.
The recent $50 million expansion of Nunhems, a global vegetable seed company based in the Netherlands, is a good example, Idaho Department of Commerce Director Don Dietrich told the legislative committee. The company's U.S. operation is located near Parma.
Companies from China, Mexico, Germany and France have also put investment capital to work in Idaho in the past year, he said.
More than 13,700 jobs in Idaho now exist because of international firms that operate in the state, Dietrich said.
Idaho Association of Commerce and Industry
Idaho Department of Commerce
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