The dollar’s decline in value is causing the phones to ring a lot more at the Des Moines office for the U.S. Commerce Department, along with several other effects the weaker currency is having on Iowa manufacturers.

A.J. Anderson, an international trade specialist for the department, said manufacturers in the state are exploring new options for international trade. Companies from all over the world, in industries ranging from value-added foods to machinery, are taking more interest in products produced in the United States due to the reduced value of the dollar, he said.

“We see a lot of manufacturers that are both making the decision to look more at the export market and ones who are being consistently contacted, unsolicited, by foreign buyers,” he said. “The low dollar makes U.S. products more attractive than some of their competitors around the world.”

Companies such as Sauer-Danfoss Inc. and Vermeer Manufacturing Co. have reported increased exports in recent months. Sauer-Danfoss, which manufactures hydraulic systems and components, reported a 13 percent increase in sales in Europe during the third quarter this year, along with a 27 percent net increase in sales.

Vermeer, which makes construction, environmental and agricultural equipment, has also reported an overall increase in sales, specifically in Europe, according to Daryl Bouwkamp, director of international sales and government affairs.

“Overall, it has had a net positive effect for our business so far in that it has helped exports, to a certain degree, because our products are less costly than other local-built options, especially in Europe and Japan, where we have significant local competition,” Bouwkamp said.

Sauer-Danfoss, which has 17 overseas plants as well as eight in the Unied States, is benefiting from the currency exchange rates, according to Ken McCuskey, the company’s vice president and chief accounting officer.

“We produce our products sold in Europe in euros, but having said that, our sales still go up because of the weak dollar,” McCuskey said. “When we translate the results in Europe into dollars, we end up with more profits.”

But, as Bouwkamp says, “currency is a two-sided coin.” The weak dollar has also caused Central Iowa companies to either pay higher prices for imported parts or products or find alternatives. Vermeer has chosen to increase domestic prices slightly to reflect the higher cost of some of its imported components and rising steel prices.

“We have felt some strong inflationary pressures from some of our component suppliers,” Bouwkamp said. “Some of our machine parts are sourced internationally, and those prices have risen.”

Sauer-Danfoss, which currently manufactures one of the products it sells in the United States at an overseas plant, now plans to make that product here to avoid the added cost of importing.

“It’s cumulated over the last couple of years as we’ve introduced that European product into the U.S. and it has been successful,” McCuskey said. “Because of that, we are in the process of setting up manufacturing operations of this product in the U.S. It is a direct reflection of the cost of importing the product here.”

The boost the weak dollar provides to U.S. exports may only be temporary, Bouwkamp figures, taking into consideration that fewer locally made products sold in Europe means a damper to that region’s economy and purchasing power.

“There is a bit of a trade off,” he said. “In some of the European countries, especially Germany, which is very dependent on exports, their economies are having a little bit of a difficult time picking themselves up. The strong euro hurts their exports, which has hurt their ability to get their economies back going again.”

Both Vermeer and Sauer-Danfoss have already felt the effects of a slowing economy in China, where the government has imposed restrictions on its economy to monitor the growth rate of its currency.

“The Chinese government has taken action to slow down the growth of the economy, and that’s something that has affected our sales, and all U.S. companies’ sales, in China,” McCuskey said. “We hope that after the Chinese New Year, they will release some of the restraints on growth.”

Our loss, their gain

The dollar is not what it was a few years ago. Over the past three years, it has fallen by 35 percent against the euro and by 24 percent against the yen. In the short term, this means American products are cheaper for buyers abroad and imports are more expensive for Americans.

Periods of the dollar’s decline have historically meant bad news for other economies. This month, Bloomberg News economists predicted that the U.S. gross domestic product will grow at a 3.8 percent annual rate during the fourth quarter, up from the 3.5 percent predicted last month. Overseas, the Japanese economy grew less than expected last quarter, with machinery orders falling, and according to government reports, French industrial output dropped in October, the third decline in four months.