fedgazette

District manufactured exports flatten in 2013

Rob Grunewald | Economist
Bijie Ren | Research Analyst

Published July 28, 2014

For the 2013 performance of manufactured exports, the shipping container might be considered half full or half empty.

On the plus side, exports from Ninth District states hit a record $46 billion. However, growth was essentially flat—at 0.3 percent—from 2012 to 2013. Individual district states saw variable results, mostly because of export performance in important, high-share countries or sectors.

Aside from sliding during the recession, manufactured exports have seen strong growth for the better part of a decade; in 2010 alone, exports jumped 17 percent. But the past two years have seen that trend slow considerably (see Chart 1). Minnesota posted the only growth last year among district states at 3.3 percent, while North Dakota had the largest decrease at 8.2 percent. U.S. manufactured exports increased 2.4 percent in 2013.

Growth in Ninth District manufactured exports slowing

Large Chart

Shipments to Canada drop

District shipments to Canada, which comprise one-third of all exports, dropped by almost 2 percent in 2013 despite a modestly growing economy. Exports of machinery, the largest export industry to Canada, decreased 5.5 percent, offsetting modest gains in transportation equipment and food and kindred products. During 2013, the U.S. dollar appreciated 3.1 percent relative to the Canadian dollar, which makes district exports more expensive in Canada (see Chart 2).

District manufactured exports to Canada decreased in 2013

Large Chart

Currency fluctuations also appear to have played a role in the next three largest export markets—Europe, Mexico and China, whose currencies all appreciated relative to the U.S. dollar during 2013, making district exports relatively less expensive in those countries. Exports to each of them also grew.

In Europe, district exports increased by almost 2 percent despite GDP decreasing slightly. Exports to Mexico followed a strong 2012 with a 12 percent climb last year. Several industries posted solid export growth to Mexico, except food and kindred products (the second-largest district export industry to Mexico, which dropped 5 percent). Meanwhile, district exports to China increased 7 percent after no gain the year before, led by 20 percent growth of computer and electronic products and food and kindred products.

Domestic growth edges out exports

The lackluster performance in exports also slowed overall growth in district manufacturing. For example, manufacturing employment grew 0.7 percent in 2013, down from 2.4 percent growth in 2012. Nevertheless, manufacturing output continued to expand. According to a regional survey of manufacturers by Creighton University (Omaha, Neb.), manufacturing grew in Minnesota and the Dakotas during 2013; results were slightly stronger in Minnesota and South Dakota compared with 2012 and slightly weaker in North Dakota. Flat export activity alongside modest employment and output growth suggests that the sector benefited more from domestic demand than foreign trade in 2013.

Exports play a much greater role in the manufacturing sector of North Dakota compared with other district states. In 2012, exports in North Dakota as a share of manufacturing GDP reached 84 percent. Other district states ranged from 37 percent in South Dakota to 46 percent in Minnesota. Much of North Dakota’s exports are to Canada: 70 percent, by far the largest share among district states.

Machinery loses ground

Among manufacturing industries, machinery is the district’s largest with 24 percent of the total. But machinery shipments decreased almost 8 percent in 2013 and declined in all district states, including a 26 percent drop in Montana. Computer and electronic products, the district’s second-largest export industry, decreased 1 percent (see Chart 3). Aside from these two industries, all other district manufactured exports combined increased 4.3 percent in 2013. Transportation posted particularly strong growth at 12 percent. Among several industries in the “Other” category, district exports in petroleum and coal products have grown 30-fold over the past decade or so, but dropped 34 percent in 2013; most originate from North Dakota and end up in Canada.

Five largest manufactured export industries

Large Chart

 

Largest export destinations and industries

Minnesota

Five largest manufactured export destinations
Total Exports 2013
(millions of dollars)
Annual Percent Change
2012-2013
Canada 5,210.8 1.2
Europe 4,472.5 6.7
Asian NIEs* 1,967.2 -5.2
China 1,677.4 7.3
Southeast Asia 1,363.7 7.0
Mexico 1,331.7 14.7
Total Manufactured Exports 19,264.5 3.3

*Asian NIEs (newly established economies) include Hong Kong, Singapore, South Korea and Taiwan.

Source: WISERTrade: International Trade Database

Five largest manufactured export industries
Total Exports 2013
(millions of dollars)
Annual Percent Change
2012-2013
Computer and Electronic Products 4,028.2 1.3
Machinery, Except Electrical 3,307.4 -2.6
Transportation Equipment 2,519.1 9.2
Miscellaneous Manufactured Commodities 1,964.6 14.8
Food and Kindred Products 1,661.8 0.9
Chemicals 1,368.5 10.9
Total Manufactured Exports 19,264.5 3.3
Source: WISERTrade: International Trade Database

Montana

Five largest manufactured export destinations
Total Exports 2013
(millions of dollars)
Annual Percent Change
2012-2013
Canada 512.7 -7.0
Europe 155.2 -18.2
Asian NIEs* 139.6 7.0
China 74.6 -7.7
Japan 42.6 -3.6
Mexico 33.1 1.5
Total Manufactured Exports 1,047.0 -7.8

*Asian NIEs (newly established economies) include Hong Kong, Singapore, South Korea and Taiwan.

Source: WISERTrade: International Trade Database

Five largest manufactured export industries
Total Exports 2013
(millions of dollars)
Annual Percent Change
2012-2013
Chemicals 278.8 -14.6
Machinery, Except Electrical 163.3 -26.4
Transportation Equipment 103.9 -1.5
Petroleum and Coal Products 91.6 -38.5
Nonmetallic Mineral Products 70.6 -3.0
Food and Kindred Products 66.3 0.6
Total Manufactured Exports 1,047.0 -7.8
Source: WISERTrade: International Trade Database

North Dakota

Five largest manufactured export destinations
Total Exports 2013
(millions of dollars)
Annual Percent Change
2012-2013
Canada 1,655.7 -1.6
Europe 216.3 -5.1
Mexico 154.6 -16.2
Pacific Islands 83.6 -35.7
Former Soviet Republics 60.5 -32.4
South America 46.7 -43.9
Total Manufactured Exports 2,350.8 -8.2
Source: WISERTrade: International Trade Database
Five largest manufactured export industries
Total Exports 2013
(millions of dollars)
Annual Percent Change
2012-2013
Machinery, Except Electrical 1,048.0 -9.4
Chemicals 377.8 12.5
Food and Kindred Products 243.5 -32.0
Petroleum and Coal Products 202.8 10.4
Transportation Equipment 153.9 -10.0
Beverages and Tobacco Products 81.7 -9.1
Total Manufactured Exports 2,350.8 -8.2
Source: WISERTrade: International Trade Database

South Dakota

Five largest manufactured export destinations
Total Exports 2013
(millions of dollars)
Annual Percent Change
2012-2013
Canada 657.8 -0.7
Mexico 341.6 -0.6
Europe 100.6 -20.7
Middle East 91.1 67.8
Pacific Islands 56.6 42.0
Asian NIEs* 47.3 30.3
Total Manufactured Exports 1,474.0 -0.7

*Asian NIEs (newly established economies) include Hong Kong, Singapore, South Korea and Taiwan.

Source: WISERTrade: International Trade Database

Five largest manufactured export industries
Total Exports 2013
(millions of dollars)
Annual Percent Change
2012-2013
Food and Kindred Products 535.1 4.0
Machinery, Except Electrical 285.9 -2.9
Transportation Equipment 171.7 11.7
Computer and Electronic Products 141.5 15.8
Beverages and Tobacco Products 98.3 -27.3
Chemicals 53.8 -28.1
Total Manufactured Exports 1,474.0 -0.7
Source: WISERTrade: International Trade Database

Wisconsin

Five largest manufactured export destinations
Total Exports 2013
(millions of dollars)
Annual Percent Change
2012-2013
Canada 6,932.4 -3.8
Europe 3,619.5 -1.8
Mexico 2,372.8 15.6
South America 1,592.6 -6.8
China 1,541.5 10.4
Asian NIEs* 1,037.4 -8.0
Total Manufactured Exports 21,766.5 -0.7

*Asian NIEs (newly established economies) include Hong Kong, Singapore, South Korea and Taiwan.

Source: WISERTrade: International Trade Database

Five largest manufactured export industries
Total Exports 2013
(millions of dollars)
Annual Percent Change
2012-2013
Machinery, Except Electrical 6,354.1 -9.1
Computer and Electronic Products 2,910.1 -4.4
Transportation Equipment 2,170.2 18.8
Food and Kindred Products 1,946.1 13.7
Chemicals 1,659.4 0.8
Electrical Equipment, Appliances, and Component 1,415.7 4.1
Total Manufactured Exports 21,766.5 -0.7

Source: WISERTrade: International Trade Database

Top