Area Economy

Exporters can expect good news in second half of year

June 21, 2013
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According to the latest numbers on global trade flows released by the World Trade Organization, in the first four months of 2013 the value of world merchandise exports rose 2.1 percent to $5.5 trillion from the same period in 2012.

WTO’s trade figures on exports from January to April show that the United States was the second-largest exporter in the world, with foreign sales hitting $522 billion — just $4 billion or 0.8 percent more than during the first four months of 2012.

China was the world’s leading exporter, selling $696 billion worth of exports so far this year. Germany, the export engine of the European Union, maintained its third place posting with $481 billion in foreign sales in 2013. Japan was ranked fourth, selling $236 billion of merchandise this year. The four countries’ combined value of exports accounts for 35 percent of all exports in the world in the first four months of 2013.

At the state level, the latest snapshot of foreign sales shows that exports of goods made in the Wolverine State surged by 11.8 percent in April, following a decrease of 8.3 percent in March. Michigan's exporters shipped abroad $4.87 billion in goods, 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 statistics indicate state exporters surpassed their previous year’s monthly volume by $423.2 million, or 9.5 percent.

Shipments abroad from Michigan's manufacturers led April’s foreign sales, accounting for 84 percent of all exports. In April, exports of manufactured items increased 13.5 percent from March to $4.11 billion, seasonally adjusted.

For the country as a whole, merchandise exports rose 1.4 percent in April to $131.1 billion, seasonally adjusted, reflecting increases in consumer goods, capital goods and automotive vehicles, parts and engines.

How did Michigan's exporters fare in terms of foreign sales growth in the first four months of 2013? In comparison to the same period of 2012, exports from Michigan’s companies — seasonally adjusted — increased by an annual rate of 3.8 percent, compared with the 0.8 percent average growth for all 50 states.

As a result, Michigan ranked 12thamong states through the first four months of 2013 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 affect thousands of export-related jobs and overall economic development? The latest forward-looking global indicators point to an upcoming recovery for state exporters.

According to the latest findings of the World Economic Survey, conducted in the second quarter of 2013 by the LFO Institute of Economic Research at the University of Munich and the Paris-based International Chamber of Commerce, the global economic climate moderately improved from the first quarter.

Reporting the results of the survey, Hans-Werner Sinn, president of the research institute, underscored that “assessments of the present situation have not yet reached the satisfactory mark. Economic expectations (for the next six months) are on the positive side.”

About 1,200 executives from 125 countries participating in the international survey appraised the current worldwide economic conditions to be about the same as in the second quarter of 2012.

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 2013, compared to current levels of export activity.

The expectation of gains in worldwide trade translates to good news for Michigan's exporters. In the second half of 2013, orders from abroad, especially from emerging economies, are forecast to moderately increase relative to current levels, which would improve production and generate new export-related jobs in Michigan.

Evangelos Simos is chief economic adviser of the consulting and research firm eforecasting.com. He may be reached at eosimos@e-forecasting.com.

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