Michigan companies experience a rebound in exports
According to the latest international trade numbers, worldwide merchandise exports edged down in December for the third month in a row to $1.4 trillion, adjusted for seasonal variation, a statistical process that smoothes out volatility in the monthly indicators for factors such as the number of days in a month and holidays.
For the whole year, worldwide exports in 2014 rose 1.3 percent from 2013, to an all-time annual high of $17 trillion.
International exports data is compiled by the World Trade Organization from 70 reporting countries that account for more than 90 percent of world trade and is adjusted for seasonal factors by e-forecasting.com.
At the national level, exports of goods fell 1.9 percent in December to $134.3 billion, adjusted for seasonal variation, from November, reflecting declines in foods, feeds and beverages; industrial supplies and materials; and consumer goods.
For the whole year 2014, U.S. exports of goods increased by 2.7 percent from 2013.
The latest snapshot for Michigan's exporting companies shows that, in the last month of 2014, foreign sales leaped to $4.59 billion, from $4.37 billion in November. December’s 5.1 percent leap at the tail end of 2014 followed a decrease of 0.2 percent in the previous month.
Compared with international sales a year ago, exporters from the Wolverine State shipped abroad in December 2014 $178.3 million, or 3.7 percent, less goods than in December 2013.
Was 2014 a good year for state companies doing business abroad and, consequently, a good year for local jobs tied to exports? For all of 2014, exports of goods made in Michigan decreased 4.6 percent from 2013.
How did Michigan's exporters fare in selling their products abroad during 2014? The state’s export performance translates to a decrease in foreign sales at an annual growth of 4.6 percent for the entire year 2014, compared to a national average of 2.7 percent in 2014. As a result, Michigan ranked 43rd among states in export growth in 2014.
The latest state export numbers reflected a mix of economic conditions in the countries of Michigan's foreign buyers and their preferences for various products from business equipment to consumer goods, parts and raw materials.
Exports of manufactured goods — a strong creator of local jobs — accounted for 85 percent of all sales abroad in December. Foreign sales from Michigan's factories increased in December by 6.1 percent from the previous month to $3.91 billion, adjusted for seasonal variation.
Exports of non-manufactured goods were flat, posting a change of 0.3 percent in December to $682.2 million, also 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.
The outlook over the next few months for exports of manufactured goods depends on the pace of incoming orders from foreign buyers. According to the January business survey conducted by the Institute of Supply Management, the nation’s purchasing executives are not optimistic about the prospects of selling their products abroad.
The Tempe, Arizona-based research institute reported its January export indicator showed a decline in incoming export orders following 27 consecutive months of expansion.
In the January survey, from the pool of respondents of the largest manufacturers that sell their products abroad, 10 percent reported greater export orders from December’s levels; 79 percent reported no change in export orders from December’s levels; and 11 percent reported smaller export orders from the previous month.
Evangelos Simos is chief economic adviser of consulting and research firm e-forecasting.com. He can be reached at email@example.com.