By Ana Gomez Salcido
While the United Kingdom is important to San Diego as a trading partner, source of tourism, and investor, its problems will not push the overall economy downward, according to Lynn Reaser, PhD, chief economist at Point Loma Nazarene University.
“The U.K. is a major export market but represents only 3 percent of the total,” said Reaser. “About 96,000 British tourists visit San Diego each year, but they represent less than 1 percent of our total tourism.”
The U.K. is the largest direct foreign investor at about 20 percent, but no major cutbacks in spending affecting San Diego enterprises are anticipated.
The greater negative effects will be the ripple effects. Concerns about slower growth prospects internationally and uncertainty have driven investors away from emerging market economies or those exposed to commodities.
Currencies, such as the Mexican peso have been hard hit, while Canada’s dollar has suffered, and the Chinese Yuan could be under downward pressure.
“Mexico, Canada, and China are large export markets and sources of tourists for San Diego, which means that their currency weakness could adversely affect us,” said Reaser. “Offsetting those negative pressures, the positive impact of lower interest rates will provide a further positive boost to housing and nonresidential real estate.”
Consumer buying power and retail sales should also be helped by a stronger dollar and lower borrowing costs.
“On balance, San Diego’s economic diversity will allow it to survive the shock of Brexit,” added Leaser. “Although along with California, it could be hurt by any long-term retreat from the expansion of global trade and investment.”
About the impact on the San Diego-Tijuana border, Director of Otay Mesa Chamber of Commerce, Alejandra Mier y Teran explained that Brexit has different impacts in the region including good and bad.
“The manufactures in San Diego that work with Mexican products, will have cheaper costs and that’s the good side of the Mexican peso devaluation,” said Mier y Teran. “What is not good in any sense, is the general volatility.”