Andy Thornton doesn't have much hope that he'll get any relief from the weak U.S. dollar in 2008.

The long decline in value of the U.S. dollar against many other world currencies accelerated in 2007, producing headaches for importers such as Thornton who buy goods from European countries.

"We're getting price increases every single day," said Thornton, co-owner of LaDifference, an international furnishings retailer in Richmond. "It is not just European based. The Canadian dollar is doing exactly the same thing."

Thornton said he was shocked to hear that one of his Canadian suppliers had recently gone into bankruptcy, in part because the company wasn't prepared for the hit it would take by the appreciation of the Canadian dollar against the U.S. dollar this year.

"I don't see how we're going to get substantial relief until we realize we have got to get our trade deficit and budget deficit in order," Thornton said.

The weak dollar can cause pocketbook pain for U.S. consumers, especially those who buy products from Europe and countries whose currencies have gained value. A declining dollar also can contribute to higher gas prices.

But the trend has been good news for many companies that make products in the United States and sell them overseas. U.S. and Virginia exports surged this year in part because of the dollar's slide. Exports from Virginia have been on the rise for several years. In the first six months of 2007, the most recent figures available, they rose 14.4 percent to $8 billion.

"A large part of that is the effect of the weak dollar," said Paul Grossman, director of international trade for the Virginia Economic Development Partnership. Grossman acknowledged that a weak dollar can be bad for buyers of imports. "But in terms of our mission of selling Virginia products around the world, the weak dollar is a tremendous help."

Although the dollar has strengthened a bit recently, 2008 looks to be a good year for exports, said Will Hall, vice president of international sales for Tallant Industries, a Fredericksburg-based company that makes specialty roofing products and has built a customer base in Europe, partly because the weak dollar makes its products more competitive with European-made goods.

"I do see or hear people who are a little more aware of exporting, so maybe more and more people will be attuned to it and active in it. Success tends to beget more success," Hall said.

Another benefit to Virginia from the dollar's slide, Grossman said, is international investment. He pointed to several major economic development announcements in 2006 and 2007, such as Rolls-Royce Plc's plans to open an aircraft engine plant in Prince George County and Swedwood North America, a subsidiary of Sweden-based IKEA, opening of a wood-furnishings factory in Danville.

"The common denominator is they are all foreign investments," Grossman said. "Because of the weak dollar, you are seeing a lot of activity with foreign companies investing in the United States. The U.S. market has always been attractive, but now it is attractive and cheap in terms of assets. If you were ever to think about investing in the United States, now is the time to do it."
Contact John Reid Blackwell at (804) 775-8123 or jblackwell@timesdispatch.com.