The Haitian Earthquake Market Impact: Close to Zero

Haiti, one of the poorest countries on the planet even before the recent devastating earthquake, is no powerhouse in the global economy.

Most people in the country are subsistence farmers. Haiti exports coffee, cocoa, and clothes. Also mangoes. . . .

The U.S. is Haiti's biggest trading partner, and U.S. companies run assembly  plants there for export back into the United States. Clothing dominates the assembly sectors, but there are also plants for electronic components and packing materials.

The main textile assembly companies are Alpha General Assembly, Caribbean Contractors SA, Gilanex Manufacturing Sa, Megatex SA and Multi-Assembly, none traded on the U.S. exchanges.

The State Departments sees business opportunities in Haiti in the development and trade of:

• agricultural products
• medical supplies and equipment
• infrastructure projects
• tourism, including arts and crafts
• development projects in waste disposal, transportation, energy, telecommunications and export assembly. 

My take: Close to zero impact on the American economy, stock markets, investors and traders.

Some clothing companies will need to find other places to assemble their products while Haiti rebuilds. Some companies will need to rebuild offices and plants, which will create demand for building materials. So there may be a few very small bumps globally.

Further reading:

A Smart Money article on the quake's economic impact.

Also, see the book below on the Trader's Bookshelf, Travels of a T-Shirt, for a look at the workings of the apparel industry in a global economy. Where does your shirt come from?

And check out the links to resources under Topics, also below.


New to Private Trader? Check out the Reader's Guide.

Trader's Bookshelf

Topics Haiti in Wikipedia CIA World Factbook State Department Country Profile Library of Congress Country Study Center for International Disaster Information White House Haiti Earthquake Site