Sequester at Home: New Hampshire Businesses Look to Exports to Make Up for Budget Cuts

By Sarah Parnass March 5, 2013

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Granite Staters are as hard to break as the rock beneath their forests; when the automatic budget cuts included in sequestration strike at the foundation of New Hampshire businesses, their owners look to new markets to help pay the bills.

The uncertainty that comes as a byproduct of the sequester alone is enough to hurt business in New Hampshire, according to Tech Resources Inc. President Paul Vermette.

In terms of purchase orders and willingness to bring on new workers, Vermette said he already sees hesitation among the people in New Hampshire's technology manufacturing sector.

"These people are middle of the road, blue-collar types of people, and they don't know if they're going to have a job tomorrow," Vermette told ABC News. He shared the story of a man who he worked with between Christmas and New Year's - as the so-called fiscal cliff loomed - and was out of a job on Jan. 2.

"That's just not fair to people. They didn't ask for that kind of risk in their jobs," Vermette said.

President Obama and his administration deny they were exaggerating when they warned the sequester could have dire consequences for the military and national security.

The Nashua Telegraph reported the state expects to lose 6,000 federal workers in addition to jobs supported by government projects.

Defense and Homeland Security contracts contribute significantly to the New England economy. New Hampshire received $1.3 billion in defense awards in 2011, according to a report by the UMass Donahue Institute.

One way the state hopes to make up for the revenue shortfalls that come from lost defense contracts is by turning to foreign markets.

On Friday the New Hampshire International Trade Resource Center launched a consortium for aerospace and defense businesses in the Granite State looking to sell their wares around the globe.

"I think the one thing that we hear from our clients is that they need to explore new markets both at home and abroad," said Chris Way, interim director of the New Hampshire Division of Economic Development. There are about 300 New Hampshire businesses in the aerospace field and 70 percent already export some products, Way estimated.

Looming sequester cuts knocked some companies off balance, according to Way.

"They don't even know how it's going to affect them and as such they're hunkering down. They're not hiring; they're not expanding," Way told ABC News. "In part the consortium adds a degree of consistency."

Exports account for almost a quarter of the state's manufacturing jobs, according to the ITRC. In 2011, exports totaled $4.3 billion, with Mexico, Canada and China as the top three markets.

Vermette said his business - a company with only 20-22 employees at present - got a majority of its sales from foreign countries in 2009 and 2010.

He said a consortium would be good for well-established businesses like his to share their expertise with those just starting out.

Ironically, the new group is funded by a federal grant for small businesses - meaning it comes from discretionary spending, the same pot threatened by sequestration.