Michigan’s increase bucks international export trend
International trade continues to stay on the downward trend that began in August 2014. According to the latest snapshot on global trade flows released by the World Trade Organization, in the first four months of 2015 the value of world merchandise exports has fallen 10.8 percent to $5 trillion from $5.6 trillion during the same period in 2014.
WTO's statistics so far this year — January through April — show the United States ranked as the second-largest exporter in the world with foreign sales of $512 billion, which was approximately $25 billion or 4.7 percent less than during the first four months of 2014.
Germany, the export engine of the European Union, maintained its third place posting of $439 billion in foreign sales in the first four months of 2015, representing a decline of 14 percent from the same period in 2014. Japan was ranked the world’s fourth-largest exporter, selling $204 billion worth of merchandise abroad this year, or 6.3 percent less than in 2014.
China, the world’s leading exporter, sold $690 billion worth of merchandise abroad so far this year, which was $11 billion or 1.6 percent more than the same period a year ago. The combined value of foreign sales of the top four countries accounted for 37 percent of all exports in the world in the first four months of 2015.
At the state level, the latest picture of foreign sales shows exports of goods made in the Wolverine State leaped by 8.1 percent in April, which followed an increase of 3.9 percent in March. Michigan's exporters shipped abroad $4.69 billion worth of goods, adjusted for seasonal variation — a statistical process that smoothes out monthly fluctuations for factors such as the number of days in a month and holidays, thus making state monthly trade indicators comparable to national numbers.
Were Michigan's exporting companies better off in April of this year than a year ago? The latest statistics indicate state exporters fell behind the previous year’s monthly foreign sales by $107.6 million, or 2.2 percent.
Shipments abroad from Michigan's manufacturers led April’s foreign sales, accounting for 85 percent of all exports. In April, exports of manufactures increased 12.1 percent from March to $3.99 billion, seasonally adjusted.
How did Michigan's exporters fare among states in foreign sales growth in the first four months of 2015? In comparison to the same period of 2014, seasonally adjusted exports from Michigan's companies decreased by an annual rate of 6.2 percent, compared with an average 4.7 percent decline for all states.
As a result, Michigan ranked 38th among states through the first four months of 2015 in export growth.
What’s the outlook for international trade in the second half of the year, which will determine the demand for Michigan's exports and ultimately will have an effect upon thousands of export-related jobs and overall economic development? The latest predictive analytics point to an upcoming recovery for state exporters.
According to the latest findings of the World Economic Survey, conducted in the second quarter of 2015 by the Center for Economic Studies at the Ludwig Maximilian University and the German Ifo Institute, the world’s economic climate edged up after “tumbling” in the last quarter of 2014.
Reporting the results of the survey, Hans-Werner Sinn, president of the research institute, pointed out the “world economy is slowly gaining impetus. The experts (participating in the survey) forecast world economic growth of 2.3 percent this year.”
About 1,100 executives from 115 countries who participated in the international survey appraised the current worldwide economic conditions to be slightly better than a year ago.
Important to Michigan's exporting companies are the findings of the World Economic Survey about international trade. The business experts from around the world anticipate the global volume of trade to modestly increase in the second half of 2015, compared to current levels of export activity.
The expectation of gains in worldwide trade translates to good news for Michigan's exporters. In the second half of 2015, orders from abroad, especially from emerging economies, are forecast to moderately increase relative to current levels, which would improve production and generate new export-related jobs here.
Evangelos Simos is chief economic adviser of the consulting and research firm e-forecasting.com. He may be reached at firstname.lastname@example.org.