Michigan ranks first in U.S. for growth of exported goods
Has the financial crisis and overall easing of economic activity in the Euro Area — the 16-member club of the European Union that uses the euro as its currency — substantially influenced foreign sales of Michigan's exporting companies?
According to the last international trade numbers of 2010, the adverse effects of the current austerity policies in Europe — from Greece to Ireland, Portugal, Spain and even the United Kingdom — have been offset by solid gains in consumers’ income in the emerging countries in Asia, the Americas and in oil-producing countries.
The last snapshot of international trade for 2010 shows that sales abroad from Michigan's companies fell 0.9 percent in October from the previous month, following an increase of 4.9 percent in September.
In October, $3,745.9 million worth of goods were shipped from Michigan going to foreign markets, which is $35.6 million less than the value of exports recorded in September.
Michigan's numbers on exports are adjusted for seasonal variation — a process that smoothes out monthly statistics for factors such as the number of days in a month and holidays, thus making them comparable to national numbers.
Manufactured goods led state exports, accounting for 86 percent of all foreign sales. Shipments abroad from Michigan's manufacturers decreased in October by 2.2 percent from the previous month to $3,237.7 million, adjusted for seasonal variation.
On an annual basis, exports from state factories were $563.0 million, or 21.6 percent, higher than in October of last year.
Exports of non-manufactured goods went up 7.5 percent in October to $508.2 million, adjusted for seasonal variation. This group of shipments abroad consists of agricultural goods, mining products and re-exports, which are foreign goods that have entered the state as imports and are exported in substantially the same condition.
In the first 10 months of this year, national exports of goods have jumped 21.1 percent from the same period in 2009, compared with a plunge in 2009 at an annual growth of 18.1 percent.
Has the foreign sales recovery of 2010 spread evenly across the nation’s exporting companies? During the January-October period, exports of goods from Michigan, seasonally adjusted, increased by an annual rate of 43.7 percent from the same period of 2009. Consequently, Michigan ranked first in export growth among the 50 states during the first 10 months of this year.
What are the short-term prospects for Michigan exports? According to a recent business survey conducted by the Institute of Supply Management, the nation’s supply executives continue to be optimistic about the prospects of growing export markets. The Tempe, Ariz., based research institute reported that its export orders index continued to show growth in new export orders in November for the 17th consecutive month.
However, November’s reading implies that the speed of new orders received from abroad is slightly slower than in October. From the pool of respondents of the largest U.S. corporations who sell their products abroad, 18 percent reported greater export orders, 56 percent reported no change in export orders from October’s levels and 26 percent reported smaller export orders.
Evangelos Simos is chief economist of the consulting and research firm e-forecasting.com.