California and its $5 billion of annual exports to Britain could be standing in harm's way if there's economic upheaval caused by Britain's vote to leave the European Union.
The state is a major trading partner with England and the rest of Britain, whose vote to exit the EU -- the so-called Brexit -- rocked financial markets Friday, with stocks plummeting worldwide and the British pound sterling falling sharply against the dollar.
The question facing California companies doing business with Britain -- which includes commercial real estate investment, technology and car dealers -- is whether the weaker pound and other fallout from the vote will slow British economic growth and make California's dollar-denominated exports too expensive, thus reducing trade.
"If the entire EU market destabilizes because of Brexit, it can have dire consequences for the California market, which is dependent on international trade," said Stephen Cheung, president of World Trade Center Los Angeles, an affiliate of the Los Angeles County Economic Development Corp.
There's also concern that British economic turmoil could affect California jobs tied directly to British companies.
There are about 1,145 British-owned stores, offices and other establishments in Southern California that employ nearly 55,000 workers, the second-largest source of foreign-owned establishments in the region behind Japan, according to the LAEDC.
A weaker British economy and currency also could curb British travel to California because those trips would be more expensive with a weaker pound relative to the dollar.
Britain was second only to China among foreign visitors to California in 2014, with 686,000 visitors spending about $905 million in the state, according to the Visit California trade group.
Hollywood studios looking for shooting locations, and other California firms seeking to invest in new facilities, also might choose a British site rather than a California location if the dollar remains so much stronger than the pound, analysts said.
A weaker British currency means the studios would collect less revenue from the box office in a major market. The stock of 21st Century Fox Inc., which has major British holdings, fell nearly 8% on Friday.
"No one in California can be immune from dramatic changes in the international economic structure," Allan Zaremberg, president of the California Chamber of Commerce, said in a statement. "California has a lot at stake."
Others were more sanguine, pointing out that Britain has yet to work out the terms of its future relationship with the EU nations.
"The U.S. and the UK are very good friends," said Robert Kleinhenz, executive director of research at Beacon Economics. "One would think that if they don't exactly replicate what they have on the books with the EU, they're going to come up with something very close."
But fear and confusion about what would happen next prompted investors to punish companies with significant British exposure more than the overall market Friday.
The stock of Los Angeles-based Aecom plunged 9.1% even though the engineering and construction concern, which has several British projects, said its diverse business made it "strong and well prepared to weather economic head winds and disruption."
"No nation has ever left the European Union, so the long-term impact of the U.K. decision cannot be accurately forecast," Aecom Chief Executive Michael Burke said in a statement.
The stock of San Francisco-based healthcare provider McKesson Corp. fell 3.8%; Alphabet Inc., the Mountain View, Calif., parent of Google, skidded 4.2%, and shares of San Jose networking giant Cisco Systems Inc. tumbled 5%.
Overall, the Britain isn't one of California's largest trading partners but it's sizable and trade between the two has been growing in recent years.
California exports to Britain totaled nearly $5 billion in 2014, the most recent year available, up from $4.2 billion in 2010, LAEDC figures show.
That ranked Britain as California's 10th-largest export destination, with computers and other electronic products accounting for the largest segment, nearly 27%.
Britain was 17th on the list of nations sending products to California, totaling $3.8 billion in 2014, up from $2.8 billion in 2010.
Some companies and analysts said the outlook wasn't as dire for California as the financial markets signaled.
Pharmaceutical giant Allergan, which is based in Ireland but has more than 2,000 employees in Southern California, said in a statement that the Brexit would have "minimal impact" on its business.
Gene Seroka, executive director of the Port of Los Angeles, said he expected the vote would have "no major impact" on the port because "we have a diversified book of business."
Justin Hughes, a former commerce negotiator in the Obama administration who now teaches international trade at Loyola Marymount University, said he did not believe Brexit would have "a substantial impact on the California economy."
But Hughes acknowledged that California firms could be hurt "if our financial community decides they're going to be so frightened that this causes a substantial global [economic] downturn. I don't think that's in the cards."
Several California companies with sizable operations in Britain said it was too soon to size up the vote's impact.
Server and networking provider Hewlett Packard Enterprise, based in Palo Alto, said it would continue business as usual while terms of the exit become clear. About 10% of the company's revenue came from Britain in its fiscal year that ended last October, according to estimates from FactSet Research Systems Inc.
Cisco said Britain "continues to be an important and significant market" for the company and that it was accustomed to adapting its business "around the challenges that the macroeconomic environment often delivers."
Cars and auto parts are among Britain's top exports to California, and Jaguar Land Rover -- with about 18% of its sales in North America -- also said it was too early to tell how the vote could affect car buyers.
Among the companies that could be hit by Britain's exit from the European Union is Los Angeles company CBRE Group Inc., the world's largest real estate services firm.
The company inked nearly 18% of its revenue from Britain in the last year and has the 10th-largest exposure to Britain among companies in the Standard & Poor's 500 index, according to FactSet.
CBRE declined to comment. In an April earnings call, Chief Executive Bob Sulentic acknowledged there was concern about the British real estate market in the run-up to the vote. But he said Britain remained "a healthy, in general, market for real estate."
Wall Street had a different reaction, with CBRE's shares plunging 9% on Friday.
Mitchell Germain, an analyst with JMP Securities, said the drop was an overreaction and noted that less than 2% of the company's revenue comes from British real estate sales -- the sector most likely to take a hit after the Brexit vote.
Times staff writer Andrew Khouri contributed to this report.