How will Japanese disaster impact consumer goods?
The horrors continue to mount in Japan, and that has cast a shadow worldwide on the outlook for some consumer goods and their prices.
Numerous manufacturers endured damage during the earthquakes and tsunamis in Japan.
Whether costs will go up now or later is being debated among experts here, and many said it was still too early to speculate.
Wall Street analysts believe investors and shareholders are taking the brunt of the losses up front as shares of many Japanese-owned companies dive in Japan and worldwide stock markets.
However, the Japanese Chamber of Commerce & Industry of Chicago believes that, at least in the short term, the cost for consumer electronics or cars could go up because of the loss of factories or suppliers in Japan, said Andrew St. John, a chamber spokesman
Japanese companies had made about 40 percent of the kinds of chips used in smartphones and tablet computers.
The massive disaster has stopped or slowed much of the country's manufacturing or exporting businesses, leaving companies scrambling to find other suppliers or ways of producing their needed materials.
The situation is likely to stabilize quickly, however, St. John said.
“In the long-term, prices probably won't go up,” he said. “They'll rebuild and jobs will come back and exports will return. They are an efficient country and will eventually rebound.”
Japan is a major supplier of:
Ÿsemiconductors and other components used in computers and smartphones
Ÿauto parts used by Ford, Chevrolet, Toyota, Honda, Nissan, Mitsubishi and others
Ÿindustrial metals, including iron ore, steel, cover and zinc
Ÿseafood, among other goods
Gasoline prices also could increase slightly here in reaction to closed-down refineries in Japan, although not with the same spike as was caused by the Middle East turmoil, St. John said.
Other analysts disagree. For most of the auto firms, including the Japanese automakers, production facilities are fairly geographically diverse, so there shouldn't be a major disruption in overall production, said Gerald Jensen, professor of finance at Northern Illinois University.
“There will probably be some shifting from some of the Japanese production facilities to other regions of the world,” Jensen said.
There may be some initial interruptions to the supply chain, said Diane Swonk, chief economist with Mesirow Financial in Chicago.
However, some segments of the American economy could benefit in the long run.
“We could see some temporary shifting of production from Japan to Japanese-owned facilities elsewhere, including the United States,” Swonk said. “Once reconstruction efforts get under way, we are likely to see a pick up in exports, as they will need our construction equipment to help rebuild. A similar phenomena occurred in the wake of the Kobe earthquake.”
The scramble to find replacement manufacturers or refiners could attract more American companies, said David Klein of Long Grove, senior vice president/financial consultant at RBC Wealth Management in Vernon Hills.