El Paso, Texas (KTSM) – The Francis Scott Key Bridge collapse in Baltimore is set to cause major economic disruptions around the nation, including the Borderland.
Thomas Fullerton, a professor of economics and finance at UTEP, said it will impact many industries, among them the sugar, salt, construction and automobile industries.
“The port of Baltimore processes a lot of sugar imports, so that is going to drive up candy prices and other goods,” Fullerton said.
Leigh Kersh, the owner of Chocolat’, a local candy store, says their business has already been feeling the impacts of inflation, causing them to make changes to their business model.
“We have cut out some of the employee benefits; we have cut out a lot of the tastings. People used to come here and taste a lot. We are trying to tamper with the situation with maybe cutbacks within our organization instead of passing it on to our customers,” Kersh said.
While the cost of sugar may spike, Kersh says this is not a concern for her.
“The sugar that we use we buy it at Sams and Costco. The people it will affect are the big, huge factories and we are not there,” Kersh added.
Fullerton said you could see a delay in getting goods, impacting mostly farm and construction machinery.
Among those materials, gypsum is imported, a mineral used for multiple purposes like drywall, fertilizer and chalk.
“The price of residential construction is already very high. Raising the price of gypsum is simply going to increase the price of drywall and other products that are used in housing construction at a particularly bad time,” Fullerton said.
The big risk that will be felt regionally and across the nation will be inflation, since it is another rupture in the supply chain.
“Inflation will remain higher in 2024 than it otherwise would have, and that is going to cause interest rates to remain higher because the federal reserve will not continue lowering interest rates until inflation ratches down in a fairly convincing manner, and now all of that is at risk because of what happened in Baltimore,” Fullerton said.
Teresa Montes, the general manager at Nissan Clark, says Nissan will not be impacted by this since they get their vehicles in from the Gulf of Mexico, but that may not be the case for other automobile brands.
“The vehicles that are coming in from Germany, which are your highline, Mercedes, BMW, and Volkswagen, will have some type of impact because they come in through that port,” Montes said.
Fullerton says economists are hoping the Baltimore bridge collapse won’t impact the local warehousing, transportation and manufacturing sectors so much since they have already dealt with the major disruption imposed by the pandemic.
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