State’s exports slip by more than 3 percent from last year
In the first 10 months of 2014, the value of world merchandise exports rose 2.4 percent to $14.3 trillion dollars from the same period in 2013, according to the latest numbers on global trade flows released by the World Trade Organization.
WTO's trade figures on exports from January-October 2014 show the United States ranked the second-largest exporter in the world with foreign sales hitting $1.35 trillion, $42 billion more than during the first 10 months of 2013.
China was the world’s leading exporter, selling abroad $1.9 trillion worth of exports, 5.8 percent more than the same period a year ago. Germany, the export engine of the European Union, maintained its third place, posting $1.28 trillion in foreign sales in 2014. Japan was ranked the world’s fourth exporter selling abroad $579 billion of merchandise this year, after a decline of 2.9 percent from 2013.
The four-country combined value of exports accounted for one-third of all exports in the first 10 months of 2014.
At the state level, the latest trade statistics show foreign sales from Michigan exporting companies rose 2 percent in October, following an increase of 0.7 percent in September. As a result, $4.38 billion worth of goods left Michigan going to international markets in October.
The state export numbers are adjusted for seasonal variation by e-forecasting.com to bring them in line with the national trade numbers, a statistical process that smoothes out monthly fluctuations for factors such as number of days in a month and holidays, thus providing a clear picture of performance similar to the national numbers.
On an annual basis, October’s statistics indicate exporters did not post gains due to foreigners’ demand for goods made in Michigan. In October, exporters sold $435.9 million, or 9.1 percent, less goods than in October of last year.
Exports of manufactured goods — an important contributor to overall economic development and a generator of export-related jobs — accounted for 83 percent of all state exports in October. Shipments abroad from state factories increased by 3.1 percent from the previous month to $3.6 billion, adjusted for seasonal variation.
How do Michigan manufacturers compare to a year ago? October’s foreign shipments from state manufacturing companies were $441.6 million, or 10.9 percent, lower than in October of last year.
Exports of non-manufactured goods went down 3.2 percent in October to $755.9 million, adjusted for seasonality. This group of shipments 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.
For the country as a whole, America’s exports, seasonally adjusted, rose in October by 1.5 percent to $138 billion, led by solid gains in foreign sales of capital goods.
Looking at export growth in 2014, a gauge of the state’s performance in competitively penetrating international markets, Michigan ranked 39th among states during the first 10 months of 2014. Compared to the same period in 2013, foreign sales from Michigan's companies, seasonally adjusted, decreased by an annual rate of 3.3 percent. Through the first 10 months of 2014, national exports of goods rose 2.9 percent, which is the 50-state average growth rate.
What are the prospects for Michigan exports next year? According to the latest business survey conducted by the Institute of Supply Management, the nation’s supply executives are optimistic about the prospects of growing overseas shipments in early 2015. The Tempe, Ariz.-based research institute reported that its export orders index rose in November.
The latest reading also indicates that new export orders in November went up faster than in October. This is good news for Michigan's exporting companies as more new export orders imply higher production and more export-related jobs in the future.
From the pool of respondents of the largest U.S. corporations that sell products overseas, 15 percent reported greater new export orders from October's levels, 80 percent reported no change in new export orders, and only 5 percent reported smaller new export orders.
Evangelos Simos is chief economic adviser of the consulting and research firm e-forecasting.com. He can be reached at email@example.com.