fedgazette

Canadian trade provides backbone for Ninth District exports

Rob Grunewald - Associate Editor, Statistics

Published October 1, 1995  |  October 1995 issue

Canada remains the backbone of Ninth District manufactured exports: In 1994, one-third of the $16.3 billion of manufactured exports in district states went to Canada. Overall, in 1994 total manufactured exports increased for all states, except Montana.

Canada leads export destinations

Since the signing of the Canada-U.S. Trade Agreement in 1988, Canadian exports have gained importance for Ninth District manufacturers. In 1987, Canada was the top destination of manufactured exports for three of five district states; now Canada is the top destination for all district states.

Despite the low value of the Canadian dollar in 1994, exports to Canada continue to expand. In fact, manufactured exports in Minnesota and Wisconsin destined for Canada grew at a faster rate in 1994 than over the previous seven years; however, they decreased slightly in Montana and North Dakota.

Just as a trade agreement has improved trade with Canada, the North American Free Trade Agreement appears to have boosted exports to Mexico. In all states, except Minnesota, manufactured exports to Mexico in 1994 grew at a faster rate than over the previous seven years, including a 135 percent increase in North Dakota. Nevertheless, exports to Mexico remain under 4 percent of the Ninth District total.

European and Asian trade mixed

Trade to Europe, the second largest export destination for all district states, improved in 1994 as the rate of European expansion grew over the past year. Manufactured exports to Europe remained level in Minnesota, but grew 15 percent in South Dakota and Wisconsin, 25 percent in North Dakota and 55 percent in Montana.

While exports have improved in Europe, a slow Japanese economy has dampened trade to Japan. Manufactured exports to Japan decreased in all states for 1994 except Wisconsin, where it increased over 50 percent.

Trade to other Asian countries generally increased in all states. Exports to newly industrialized countries in Asia, which include Hong Kong, Singapore, South Korea and Taiwan, increased 35 percent in North Dakota and 45 percent in South Dakota, but dropped over 40 percent in Montana. Trade to the Pacific Islands, which include Australia, New Zealand and other nearby islands, make a small percentage of Ninth District exports, but in 1994 they doubled in Montana and tripled in North Dakota.

Machinery and high technology remain strong

Exports of machinery and computer equipment remain the top export industry in all states, producing one-third of all Ninth District manufactured exports. While exports of machinery and computer equipment decreased slightly in 1994 for Minnesota and Montana, they grew 15 percent in Wisconsin, 30 percent in North Dakota and 50 percent in South Dakota.

In other industries, exports of food and kindred products increased for all district states, except Montana, after losses a year ago. Primary metal exports dropped 20 percent in South Dakota and 50 percent in Montana, which continues a downward trend over the past seven years. The most dramatic change was a 115 percent increase in exports produced by miscellaneous manufacturing industries in Montana, which include sports equipment, coin operated game machines and gold and silver products.

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