High-tech products led N.H. exports in May
New Hampshire’s economic prospects continued to look lively in May as international trade data show exports holding up at high levels, which translates to encouraging news for export-supporting local jobs. Following monthly gains of 4.7 percent in April, exports of goods from the Granite State were unchanged in May, at $203 million, adjusted for seasonal variation - a statistical process that smoothes monthly performance for factors such as the number of days in a month and holidays. May’s reading was the third-highest level in state exports since August 2001. Compared to a year ago, New Hampshire’s exporting companies fell slightly behind their performance in 2004. In May of this year, state exporters shipped abroad $5.4 million, or 2.6 percent, less in goods than in May of last year. At the national level, U.S. exports, seasonally adjusted, were almost flat, edging slightly down by 0.1 percent, to $74.5 billion in May from $74.6 billion in April, which had been the highest level on record. The latest near-record performance in national exports reflected increases in sales of consumer goods and industrial supplies as well as exports of foods, feeds and beverages, which all hit an all-time high. Manufacturers were a major contributor to New Hampshire’s trade accounting for 80 percent of all state exports. In May, purchases by foreigners of goods made in the Granite State held nearly steady. International buyers paid in May $161.3 million, adjusted for seasonal variation, for all types of goods manufactured in New Hampshire, which was slightly less than in the previous month. Five exporting industries contributed about three-fourths to all state exports in May. Machinery — mainly office equipment, personal computers and other high tech products — was the state’s largest export earner, generating $59 million in foreign sales in May. Electrical equipment — mostly telecommunication products and integrated circuits — was the state’s second-largest exporting industry, creating $58 million in export revenues. Medical instruments were the third-largest exporting industry, with shipments abroad of $26 million in May. The combined foreign sales of these three industries totaled $143 million — 70 percent of all state exports in May. Plastics and iron and steel followed in the list of the top five exporting industries. Exports of volatile non-manufactured goods went up 6.1 percent in May to $41.7 million, adjusted for seasonal variation. This group of foreign 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 as when imported. May’s foreign sales from New Hampshire’s manufacturing plants supported a total of 17,800 factory jobs. (Job creation in the state’s manufacturing industries consists of employment generated directly from the production of the exported goods as well as indirectly from employment in supporting industries which supply exporting companies with parts, tools and equipment needed by the exporters.) In May, 10,900 manufacturing jobs in New Hampshire were directly tied to exports and another 6,900 jobs were indirectly supported by exports of manufactured goods. More important, manufacturing production sparks off ripple effects in other industries. Wholesale and retail trade, transportation, business services and, to a lesser degree, utilities, mining and agriculture are influenced by manufacturing activity. A convenient way to look at the link of employment between industries is the number of non-manufacturing jobs supported by every 100 manufacturing jobs. In New Hampshire, 104 non-manufacturing jobs were generated by each 100 manufacturing jobs tied to exports in May. Looking at export growth - a depiction of how fast state companies penetrate foreign markets - New Hampshire ranked 35th among the 50 states in the first five months of 2005. In comparison to the first five months of 2004, foreign sales from New Hampshire’s companies, seasonally adjusted, increased by an annual rate of 7.3 percent compared with a 10.6 percent average for the nation as a whole. Will export orders from foreign merchants continue to grow in the rest of the year? It depends on the economic vitality in the rest of the world. A recent survey of about 1,100 executives from 91 countries conducted by the German Ifo Research Institute and the International Chamber of Commerce features a global economic climate indicator that declined in the second quarter of this year but stayed above its long-term average level, signaling a slowdown in business activity. Most important with respect to international trade, the experts polled by the Ifo Institute expect both exports from and imports to their countries to increase in the next two quarters, compared to current trends. Consequently, the global trade outlook is favorable and will result in growing exports for New Hampshire’s companies for the rest of this year. Evangelos Simos, chief economist of the consulting and research firm Infometrica Inc., is editor of international affairs for the Journal of Business Forecasting and professor and department chair at the University of New Hampshire. He may be reached at email@example.com. Distributed by Infometrica Inc.