State manufacturers enjoy 10 percent annual hike in exports
In the first three months of 2014, the value of world merchandise exports rose 1.8 percent to $4.1 trillion from the same period in 2013, according to the latest snapshot of global trade flows released by the World Trade Organization.
WTO's export statistics from the first quarter of 2014 show that the United States ranked as the second-largest exporter in the world so far this year, with foreign sales hitting $400 billion, which was $9 billion or 2.3 percent more than during the first quarter of 2013.
China was the world’s leading exporter, selling abroad $491 billion worth of exports so far this year, which surprisingly was $17 billion or 3.4 percent less than the same period a year ago. Germany, the export engine of the European Union, maintained its third-place posting with $383 billion in foreign sales in the first quarter of 2014, a jump of 7.1 percent from 2013. Japan was ranked as the world’s fourth-largest exporter, selling abroad $170 billion of merchandise this year, or 4 percent less than in 2013.
The four-country block’s combined value of exports accounted for 35 percent of all exports in the world in the first quarter of 2014.
At the state level, the latest export numbers show that shipments abroad from Michigan companies rose 3.2 percent in March, following an increase of 3.4 percent in February. As a result, $4.86 billion worth of goods left Michigan going to international markets in March.
The state trade figures are adjusted for seasonal variation by e-forecasting to bring them in line with the national trade numbers — a statistical process that smoothes out monthly fluctuations for factors such as the number of days in a month and holidays, thus providing a clear picture of monthly performance similar to the national numbers.
On an annual basis, March’s trade statistics indicate exporters posted gains due to foreigners’ demand for goods made in Michigan. In March of this year, exporters sold $495.9 million or 11.4 percent more goods than in March of last year.
Exports of manufactured goods — an important contributor to both factory and services-related local jobs — accounted for 82 percent of all state exports in March. Sales abroad from state manufacturers decreased in March by 1.8 percent from the previous month to $3.99 billion, adjusted for seasonal variation.
Were foreign sales of Michigan manufacturers better than a year ago? March’s foreign shipments from state factories were $368.0 million, or 10.2 percent, higher than in March of last year.
Exports of non-manufactured goods went up 34.4 percent in March to $868.3 million, adjusted for seasonal variations. 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, America’s exports of goods, seasonally adjusted, rose in March by 2.8 percent to $135.1 billion. The latest increase in merchandise exports reflected increases in capital goods; industrial supplies and materials; automotive vehicles, parts and engines; and foods, feeds and beverages.
Looking at state export growth in 2014, a measure of the companies' success in increasing their market share into foreign markets, Michigan ranked 24th during the first three months of this year. Compared to the same period in 2013, foreign sales from Michigan's companies, seasonally adjusted, increased by an annual rate of 1.1 percent. So far this year, national exports of goods rose 2.3 percent, which meets the national average growth rate.
The prospects over the next few months for exports of manufactured goods depend on the pace of incoming orders from abroad. According to the April business survey conducted by the Institute of Supply Management, the nation’s purchasing executives are optimistic about the outlook of growing export markets.
The Tempe, Ariz.-based research institute reported that its export indicator showed an expansion in incoming export orders for the 17th month in a row. Importantly, the “speed” of incoming orders in April was faster than in March, implying acceleration in exports over the next few months.
From the pool of respondents of the largest manufacturers that sell their products abroad, 19 percent reported greater export orders in April; 76 percent reported no change in export orders from March levels; and only 5 percent reported smaller export orders from the previous month.
Evangelos Simos is chief economic adviser of the consulting and research firm e-forecasting.com. He may be reached at email@example.com.