Area Economy

Michigan gives back its gains in foreign exports

February 28, 2014
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The latest snapshot for Michigan’s exporting companies shows that, in the last month of 2013, foreign sales dropped to $4.77 billion from $5.22 billion in November, adjusted for seasonal variation, a statistical process that equalizes recurring volatility in the monthly state indicators for factors such as the number of days in a month and thus brings them in line with national indicators.

December’s 8.6 percent drop in state exports at the tail end of 2013 followed an increase of 8.5 percent in the previous month.

Compared with international sales a year ago, in December 2013 exporters from the Wolverine State sold abroad goods worth $179.6 million, or 3.6 percent less than in December 2012.

Was 2013 a good year for Michigan's exporters and, consequently, a good year for local jobs related to exports? For all of 2013, exports of goods made in Michigan increased $1.55 billion to $58.46 billion, compared to $56.9 billion in 2012.

How did Michigan’s exporters fare in selling their products abroad during 2013? State merchandise exports increased by an annual growth of 2.7 percent for the entire year 2013, compared to an average increase of 1.9 percent for the country as a whole. As a result, Michigan ranked 20thamong states in export growth in 2013.

Last December’s state export numbers display a mix of overall economic conditions in the countries of foreign buyers and also their preferences — related to quality, design and price — for various goods made in Michigan, from semiconductors to consumer goods, parts and raw materials.

State exports of manufactured goods — an important engine of economic development and jobs — accounted for 87 percent of all sales abroad in December. Foreign shipments from Michigan's factories decreased in December by 7.6 percent from the previous month to $4.15 billion, adjusted for seasonal variation.

Michigan exports of non-manufactured goods went down 14.9 percent in December to $620 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 as when imported.

What are the worldwide economic prospects for 2014, which will shape the volume of global trade and eventually the foreign demand for goods made in Michigan? In its latest update of the World Economic Outlook released last month, the International Monetary Fund indicated that global growth is on the rise “after having been stuck in low gear in 2013.”

“The basic reason behind the stronger recovery is that the brakes to the recovery are progressively being loosened,” said Olivier Blanchard, IMF director of research.

The IMF projects global economic activity to expand by an annual growth rate of 3.7 percent in 2014 and 3.9 percent in 2015, following an estimated growth rate of 3 percent in 2013.

For the important export markets of the advanced economies, also called the industrial countries — the group includes Europe, North America and Japan — economic growth is forecast to accelerate to 2.2 percent from 1.3 percent in 2013. These economic growth numbers are not enough to make a dent in the unemployment rate in the advanced economies.

However, the International Monetary Fund is more optimistic on economic growth for the emerging economies — like China and India — predicting the group to average an annual growth rate of 5.1 percent in 2014, up from 4.7 percent in 2013. Consequently, the non-industrial countries will continue to be the major source of increase in global demand for goods made in Michigan this year.

IMF also predicts a solid pickup in the growth of international trade this year. The World Economic Outlook forecasts global trade to advance by an annual rate of 4.5 percent in 2014, following increases of 2.7 percent in both 2013 and 2012.

Evangelos Simos is chief economic adviser of the consulting and research firm He may be reached at

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