A World of Woe for Big U.S. Exporters?

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"In order to break the price of oil, a fair amount of the world has to slow down," says Bob Baur, chief global economist for Principal Global Investors (PFG).

No relief soon

Some parts of the globe are clearly not slowing at all, particularly commodity-driven economies like Russia and those in the Middle East and Latin America. "At this point, commodities haven't ceased booming," Moffett says. "But at some point they will" if global growth slows.

The rest of the world may simply be catching up with economic problems in the U.S. "Our economy is probably leading the rest of the world," Moffett says. "We led it down, and we'll probably lead it back up."

But how long will it take for a rebound in the U.S. to materialize? Lower commodity prices would almost certainly benefit the U.S., particularly American consumers whose spending makes up more than two-thirds of the U.S. economy. But there's no guarantee that relief from rising oil prices is coming soon.

In the meantime, consumer spending has slowed, and threats of a global slowdown sap the U.S. economy and stock market's only source of strength. "The brightest spot in the U.S. economy has been the growth in the export sector," Webman says. "It's going to be harder to depend on that."

Holding Up Well

Some say the recent sell-off in exporters' stocks is overdone. They see signs of hope. For example, even after a slowdown, nations like China and India will still be growing quickly. Also, while growth appears to be slowing in parts of Europe such as Italy and Spain, other parts of Europe, including Germany, appear to be holding up well.

For years, investors have bet on shares of Caterpillar and other U.S. exporters because of the long-term potential of these companies amid a worldwide infrastructure building boom (BusinessWeek.com, 9/11/07). Both developed and emerging economies are spending big on roads, electricity, water and sewer systems, and on products needed to satisfy commodity demand, such as oil drilling and mining equipment.

There's little evidence this infrastructure boom is slowing. In fact, it may be accelerating, and few projects will be cancelled just because growth is slowing a bit. "Many emerging [nations] have set some money aside for a rainy day," says Michele Gambera, chief economist at Ibbotson Associates. "They're likely to keep building infrastructure during a world slowdown."

What has recently scared investors is a series of short-term setbacks—inflation, a stabilization of the U.S. dollar, evidence of slower growth in Europe, and worries about slowing growth in emerging economies. There's no way of knowing how bad these problems will get, or how long they'll last. However, they don't change the longer-term reality: The world is eager to invest in new infrastructure, and U.S. industrial concerns are well-positioned to meet that demand.

Steverman is a reporter for BusinessWeek's Investing channel.