“Dublin looks pretty attractive right now, and Heathrow not so much."
Rep. Joe Courtney
Europe is Connecticut’s number one trading partner, so the seismic events of last week, as the U.K. voted to leave the European Union, are reverberating here as well.
Connecticut exports some $15 billion worth of goods and services each year, and France, Germany and the U.K. are all in the top ten countries where those goods and services end up.
“I think there’s a lot of Connecticut companies that are scrambling,” said second district Congressman Joe Courtney. He's been closely involved with many companies’ efforts to expand sales overseas. Courtney said that now the task is to understand more about what Britain’s exit from the European Union might mean for them.
But the trouble is that no one really knows.
“This has never happened before," said economist Alissa DeJonge. "It’s an unprecedented action for a relatively large economy.”
DeJonge, who works for the Connecticut Economic Resource Center said the Brexit result raises many additional questions -- for instance, whether other countries will follow suit and the entire EU will be destabilized.
And the knock on effects on global markets may mean an economic slowdown here.
“That can definitely affect company investments, because when things are uncertain, companies typically reduce their investments,” DeJonge said.
United Technologies has reaffirmed its commitment to doing business in the U.K. and the EU in the wake of Brexit.
"We are hopeful that the separation process will be carried out in a manner that minimizes disruption and economic impact," said CEO Greg Hayes. "We believe that the current benefits of a free and open trading zone will largely remain at the conclusion of this process. As a globally diversified company, we are well equipped to manage these types of uncertainties."
The Farmington-based conglomerate has some 8,000 employees in the U.K. UTC says its $2 billion worth of annual sales in the U.K. are less than four percent of its overall revenue, although that's still a sizeable slice.
Courtney said the immediate effects for many companies include the plunging British pound, now at a 30-year low. That’s great for tourists who might want to vacation there this summer, but terrible for companies whose goods are now much more expensive overseas.
“I’ve been in the room on trade missions with Connecticut companies that show over and over again that they’re number one in terms of quality and online delivery and understanding things like deadlines, but at some point, cost is an issue,” said Courtney.
He's hopeful that the initial shock will give way to an understanding that nothing will happen quickly. But he said particularly with the start of a new direct flight service from Hartford on Aer Lingus, Ireland may begin to gain favor as Connecticut’s new gateway to Europe.
“Dublin looks pretty attractive right now, and Heathrow not so much," Courtney said.