Demand for Michigan goods is fading globally

December 5, 2011
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The latest monthly and quarterly economic indicators from around the globe confirm that the world economy has slowed down amid the financial crisis in Europe and weakening growth in Asia. As a result, we see a fading trend in the foreign demand for goods made in Michigan.

According to the latest export numbers, shipments abroad from Michigan’s exporting companies fell to $4.27 billion in September, which is $36.3 million or 0.8 percent less than in August. Like national exports, the state’s export numbers are adjusted for seasonal variation, a statistical process that smoothes monthly performance for factors such as the number of days in a month and holidays.

How are Michigan's exporting companies doing compared with the same time last year? In September, state companies sold $544.5 million, or 14.7 percent, more goods to foreign customers than in September 2010.

September’s state exports for the most part were driven by manufactured goods, which accounted for 86 percent of all state exports. Foreign sales from Michigan's manufacturers increased in September by 0.1 percent from the previous month to $3.64 billion, adjusted for seasonal variation.

On an annual basis, shipments abroad from state factories were $406 million, which is 14.7 percent higher than in September of last year.

Exports of non-manufactured goods dipped 6 percent in September to $610.9 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 as when imported.

Worldwide, in the first nine months of 2011, seasonally adjusted merchandise exports increased by 21.7 percent, according to data compiled by the World Trade Organization, based on 70 monthly reporting countries that account for more than 90 percent of world trade.

For the United States, so far this year exports of goods rose by 18.1 percent in comparison to the first nine months of last year.

How do Michigan's companies measure up in export growth to other states and the worldwide average so far this year? Michigan ranked 31st in export growth among the 50 states during the first nine months of 2011. Particularly, compared with the same period in 2010, foreign sales from Michigan's companies, seasonally adjusted, increased by an annual rate of 15.4 percent.

What are the prospects for Michigan exports? According to the latest business survey, conducted by the Institute of Supply Management, the nation’s supply executives are not optimistic about the prospects of growing export markets. The research institute, which is based in Tempe, Ariz., reported that its export orders index was flat in October, following 28 consecutive months of growth in incoming orders from abroad.

From the pool of respondents of the largest U.S. corporations that sell products overseas, 14 percent reported greater export orders, 72 percent reported no change in export orders from October's levels, and 14 percent reported smaller export orders.

Evangelos Simos is chief economist at consulting and research firm He may be reached at

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