Michigan exports plunge 37 percent from a year ago
International trade connects the twists and turns of the global economy with Michigan's exporting companies, thus affecting local production activity, sales, profits and, most importantly, jobs. In its latest Economic Outlook, the Paris-based Organization for Economic Cooperation and Development (OECD) said that international trade is currently on a “free fall.”
According to the watchdog of the international economy, the recent downturn in global economic activity is without precedent in the post-war period in terms of both its harshness and its worldwide spread at the same time. OECD estimates that over the last quarter of 2008 and in the first quarter of this year, world trade has fallen at an average annual rate of more than 20 percent, “a rate of decline not previously experienced over the last four decades.”
In the latest snapshot of trade numbers, exports of goods made in the Wolverine State dropped by 6.9 percent in March to $2,275.7 million, from $2,443.7 million in February, adjusted for seasonal variation — a statistical process that smoothes out monthly fluctuations for factors such as the number of days in a month and holidays, thus truly revealing monthly performance.
On an annual basis, Michigan's exporters did not post gains in marketing their goods abroad. In March of this year, foreign outbound shipments from state companies fell behind their level during March 2008 by $1,357.1 million, or 37.4 percent.
Exports of manufactured goods dominated the state’s international trade, accounting for 86 percent of all exports. In March, shipments abroad from Michigan's factories increased 0.2 percent to a seasonally adjusted volume of $1,946.8 million from February. In comparison with last year, March’s state exports of manufactured goods were 32.1 percent lower than in March of 2008.
Exports of non-manufactured goods went down 34.4 percent in March to $328.9 million, adjusted for seasonal variation. This group of shipments abroad consists of agricultural goods, mining products, and re-exports which are foreign goods that entered the state as imports and are exported in substantially the same condition as when imported.
For the country as a whole, U.S. exports of goods, seasonally adjusted, fell by 3.0 percent in March to $82.0 billion from the previous month. Consequently, in the first quarter of 2009, US exports of goods fell to $248.7 billion, which is $69 billion or 21.7 percent less than in the first quarter of 2008.
Michigan ranked 46th in export growth among the 50 states during the first quarter of this year. Particularly, in comparison with the first quarter of 2008, foreign sales from Michigan's companies, seasonally adjusted, decreased by an annual rate of 38.0 percent.
In the group of about 300 executives representing the largest U.S. corporations that sell their products overseas, only 13 percent reported higher new export orders in April from March’s levels; 62 percent reported no change in the flow of new export orders from the previous month and 25 percent reported receiving a lower volume of new export orders.
Evangelos Simos is chief economist of the consulting and research firm Infometrica Inc.