China’s economic slowdown has affected countries around the world; many economies rely heavily on exports to China. In the United States, Massachusetts companies have begun to feel the impacts of China’s declining manufacturing industry.
China’s Manufacturing Decline Causing Losses for MA Businesses
In early September, several Massachusetts-based companies trading on the NYSE and NASDAQ showed price-per-share (PPS) losses. Dunkin’ Brands (the umbrella of Dunkin’ Donuts) was off-target by 2.89% and Eaton Vance Management was down 2.88%. Some publicly traded stocks were off by significantly higher margins, including American DG Energy, Inc., which was off 15%, and Collegium Pharmaceutical, off by 10%. Collegium has been plummeting for about a month now and American DG Energy, Inc. is at its lowest PPS since 2009.
Recession Concerns for Institutions of Higher Education
The suffering economy in China is also impacting the well-being of higher education in Massachusetts. Many universities in the commonwealth, as well as many others throughout the United States, depend on the enrollment of international students, especially from China. If the economic situation in China does not improve, Chinese students may not be able to afford the expenses of studying in the United States. Hundreds of US universities have Chinese programs; if schools are unable to fill them, there may be a resultant shift in the economic stability of these institutions.
Some Companies Benefit
Luckily, not all MA industries are facing losses from this turn in China’s economy. Less competition from China—a behemoth in each of the above industries—gives some US companies a chance to flourish. Two companies in Massachusetts actually showed recent gains. Ocata Therapeutics (a biotech- and cell therapy company) and Echo Therapeutics (a health- and lifestyle technology company) were up 6.97% and 4.1%, respectively. Technical Communications showed gains of 5.11%.
Monitoring Impact of China’s Recession on Businesses in MA
Clearly, the economic fluctuation of a country as massive as China has a number of effects on the commonwealth. Some Massachusetts companies swell while others suffer, and universities and colleges are left nervously awaiting the trickle-down effects. We will continue to monitor China’s impact on MA businesses in the coming weeks and months. If you have any personal insights on this topic, please share them below!