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Exports from Michigan dropped 81 percent in April
In its latest release of worldwide merchandise trade statistics, the World Trade Organization announced that the value of world trade rose by 23 percent in March of this year, in comparison with the same month last year. With available monthly statistics on global exports for about 70 reporting countries — which represent more than 90 percent of the world’s total — WTO announced that in March “the value of trade reached for the first time a level superior to the pre-crisis maximum of July 2008.”
Moreover, WTO’s preliminary statistics for April indicate that global exports have continued their strong recovery advancing in April by an estimated annual growth rate of 21 percent from the same month in 2010.
At the state level, the latest snapshot of international sales shows that sales abroad of goods made in the Wolverine State pulled back, declining 8.1 percent in April after an increase of 20.2 percent in March.
Michigan's exporters sold abroad $4,247.1 million in goods, the fourth largest monthly level on record. State exports are adjusted for seasonal variation, a statistical technique that smoothes out monthly fluctuations for factors such as the number of days in a month and holidays, thus making state monthly trade indicators comparative to the national numbers.
Were Michigan's companies selling goods abroad better off in April of this year than a year ago? The latest trade numbers indicate that state exporters surpassed their previous year’s monthly volume by $486.5 million, or 12.9 percent.
Foreign shipments from Michigan's manufacturers led April’s exports, accounting for 87 percent of all sales abroad. In April, exports of manufactures decreased 5.4 percent from March to $3,693.3 million, seasonally adjusted.
For the nation, exports of goods rose 1.6 percent in April to an all-time high of $126.4 billion, seasonally adjusted, led by historical record sales of industrial supplies, capital goods and petroleum.
How did Michigan's exporters fare among the 50 states in foreign sales growth in the first four months of 2011? In comparison to the same period of 2010, exports from Michigan's companies, seasonally adjusted, increased by an annual rate of 13.2 percent, compared with 19.4 percent average growth for all 50 states.
As a result, Michigan ranked 36th among the 50 states through the first four months of 2011 in export growth.
What is the global outlook for international trade in the second half of the year, which determines the demand for Michigan's exports and ultimately will have an effect upon thousands of export-related jobs and overall economic development? The latest forward-looking global indicators point to a weakening outlook for state exporters.
According to the latest findings of the World Economic Survey, conducted in the second quarter of 2011 by the Ifo Institute of Economic Research at the University of Munich and the Paris-based International Chamber of Commerce, the global economic climate continued to improve. The latest reading of the WES overall indicator that captures worldwide economic conditions rose again, although at a slow pace, in the second quarter of 2011.
Reporting the results of the survey, Hans-Werner Sinn, president of the research institute, underscored that the indicator’s latest advance “resulted solely from more positive assessments of the present economic situation. The economic expectations, in contrast, (were) less optimistic than in the previous quarter.”
Simply put, things now are better than we thought, but we are much more worried about the future than before.
About 1,100 executives from 120 countries participating in the international survey appraised the current worldwide economic conditions to be better than a year ago. Looking at the rest of 2011, “the upturn of the world economy will continue in the coming months but will be somewhat more bumpy than in the recent past,” Sinn added.
Important to Michigan's exporting companies are the findings of the World Economic Survey about international trade. The business experts from around the world anticipate the global volume of trade to increase in the second half of 2011, compared to current trade activity. A surge in imports, which translates to exports for other countries, is expected from emerging economies: Brazil, Costa Rica, Panama, Liberia, Kuwait, Saudi Arabia, Turkey, Hong Kong, Singapore, India, Taiwan, Estonia, Russia and Scandinavia (Finland and Sweden).
The expectation of gains in worldwide trade translates to good news for Michigan's exporters. In the second half of 2011, orders from abroad, especially emerging economies, are projected to increase — although at a slower pace than in the past — which would improve production and continue to generate new export-related jobs in the Wolverine State.
Evangelos Simos is chief economist of consulting and research firm e-forecasting.com. He may be reached at email@example.com