Exports from the Wolverine State surged 10.9 percent in June
International trade predictive analytics, which summarize worldwide merchandise exports, clearly point out an undergoing global economic slowdown.
Trade figures, released by the World Trade Organization, indicate that, in the first half of 2015, global exports dropped 11.2 percent from the same period a year ago. In June of this year, global exports declined by 10.6 percent from a year ago to a monthly mark of $1.3 billion — the 11th consecutive monthly decline in a row.
It seems a worldwide economic downturn is in progress, which has adverse effects upon the demand for Michigan's foreign sales with an unpleasant impact on local jobs and overall economic development.
The latest snapshot of international trade numbers shows that exports of made-in-Michigan goods surged $449.8 million or 10.9 percent in June, following a decrease of 11.8 percent in May.
June’s surge resulted in a monthly volume of foreign sales of $4,580.6 million, adjusted for seasonal variation, a statistical technique that mitigates monthly fluctuations for factors such as the number of working days in a month and thus gives a clear picture of monthly trends similar to the national trade numbers.
In comparison with last year, the latest numbers of state exports show Michigan's companies did not post gains in selling their goods overseas. In June 2015, exporting companies shipped overseas $69.8 million, or 1.5 percent, fewer goods than in June 2014.
Michigan's sales abroad reflect a mix of foreigners’ desires for goods made by the state’s major exporting industries. International shipments of manufactured goods — a major contributor to the state’s economic development and an important creator of jobs — accounted for 84 percent of all state exports in June.
Overseas shipments from Michigan's manufacturers increased in June by 9.8 percent from the previous month to $3,867.2 million, adjusted for seasonal variation.
Compared with June of last year, the latest reading of exports from state factories was $91.7 million lower.
This is important news for economic development and jobs in the Wolverine State. It is estimated that one in every four local factory jobs is tied to exports because of the high-labor content in the chain of production delivering technologically advanced goods to major markets around the world.
Exports of non-manufactured goods went up 17 percent in June to $713.4 million, seasonally adjusted, from May. This group of shipments abroad consists of agricultural goods, mining products and re-exports, which are foreign goods that entered Michigan as imports and are exported in substantially the same condition as when imported.
At the national level, exports of goods fell 0.2 percent in June to $127.6 billion, adjusted for seasonal variation, from May, reflecting declines in capital goods, telecommunication equipment and commercial vehicles. In the first six months of 2015, U.S. exports of goods dropped 5.3 percent from the first six months of 2014.
How did Michigan's companies fare in export growth through the first half of this year, which in turn impacts jobs and economic development in the state? Michigan ranked 33rd in export growth among the 50 states during the first six months of 2015. Particularly, in comparison with the first six months of 2014, foreign sales from Michigan's companies, seasonally adjusted, decreased by an annual rate of 6.9 percent.
What is the current pace of incoming orders from abroad for manufactured goods? According to the July business survey conducted by the Institute of Supply Management, the nation’s purchasing executives are not optimistic about the prospects of growing export markets.
The Tempe, Arizona-based research institute reported their export indicator showed a decline in incoming export orders for the second month in a row and for the fifth time in 2015.
From the pool of respondents of the largest corporations that sell their products abroad, only 11 percent reported more export orders in July than in the previous month; 74 percent reported no change in export orders from June’s levels; and 15 percent reported smaller export orders from the previous month.
Evangelos Simos is chief economic adviser of the consulting and research firm e-forecasting.com. He may be reached at email@example.com.