Granite State exports fell 0.8 percent in November
Overseas sales of made-in-New Hampshire products — which had been rising for much of 2004 – declined again in November, in line with the precipitous drop in national exports that caused a record U.S. trade deficit.
After having fallen in October by 5.3 percent, exports of goods from New Hampshire’s companies, adjusted for seasonal variation, held almost steady in November, edging down by $1.7 million, or 0.8 percent, to $199.1 million.
In comparison to the same period a year ago, exporting companies from the Granite State shipped abroad in November of 2004 $12.7 million, or 6.8 percent, more goods than in November of 2003.
The state-specific international trade numbers for November reflected a blend of different trends in foreign demand for the state’s major exporting industries. Exports of manufactured goods – the foreign engine of state economic development and a generator of factory jobs – accounted for 79 percent of all sales abroad in November.
Foreign shipments from New Hampshire’s factories fell in November by 5.5 percent from the previous month to $157.2 million, adjusted for seasonal variation. However, looking at the annual trend of exports, sales abroad from New Hampshire manufacturers last November were $8.1 million, or 5.4 percent, higher than in November of 2003.
Exports of non-manufactured goods went up 21.7 percent in November to $42 million, also adjusted for seasonal variation. This group of shipments abroad 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.
At the national level, exports of goods in November – reported by the Census Bureau on a seasonally adjusted basis – fell 3.8 percent from October to $66.5 billion, led by steep declines in foreign sales to Canada, Mexico, the Euro area and Japan, which combined to buy 60 percent of all U.S. exports.
The unexpected decline in exports, combined with an increase in imports, resulted in an all-time high U.S. trade deficit in November, which generated news on trade policies, the role of the dollar and the future of American jobs.
China’s dynamic economy
Although the largest trade deficit in November was again with China, a shortfall of $16.6 billion, it improved in November. In times of record negative economic numbers – especially for issues directly related to jobs – the media, politicians and businesses need a scapegoat. Again, China-bashing was the choice, with the recent release of the trade statistics.
Should we blame – and to what extent – China for stealing U.S. jobs in general, and New Hampshire jobs in particular?
Since Deng Xiaoping introduced market reforms two decades ago, the Chinese economy has grown at an astonishing average rate of 9.3 percent per year, about three times faster than our economy. As a result, the world’s most populous country has also become an enormous economic market.
Using the World Bank’s measure of gross domestic product, China is second only to the United States, with a 12.4 percent share of the world’s GDP. In 2003, the market size of China was $6.4 trillion, about 60 percent of the U.S. market, which registered $10.9 trillion.
China is the most dynamic large economy in the world, and its markets are booming. It has become an export power and the world’s biggest market for high-ticket consumer goods like cars, appliances and telecom equipment. If the current Chinese growth continues, in about a decade China will be the world’s largest economy.
Under this global economic environment, China’s vigorous demand for raw materials, parts and final manufacturing goods should be welcomed. In 1999, China ranked as the sixth market for exports from the European Union and was the 12th-largest destination of U.S. goods. Just four years later, China moved into third place as a market for exports from the European Union and it ranked the sixth-largest destination of all U.S. exports.
In 2004 from January through November, national exports to China rose by 25.4 percent from the same period in 2003 to $31.5 billion; this compares with an increase of 12.3 percent in foreign sales to the rest of the world. As a result, demand for U.S.-made goods from China grew two times faster than demand from all other countries combined.
As of November 2004, China was the fifth-largest destination of all U.S. exports, behind Canada, Mexico, Japan and the United Kingdom. Also, for the first 11 months of 2004, Chinese buyers purchased 4.2 percent of all U.S. exports.
At the state level, consumers and businesses from the world’s second-largest economy bought $94.4 million of goods made in New Hampshire in the first 11 months of this year.
Looking at the global marketing efforts of state exporting companies to penetrate the fast-growing Chinese markets, the Granite State ranked 20th among the 50 states in 2004.
Compared to the same period of last year, January to November of 2003, exports to China from New Hampshire increased by 39.7 percent. At the same time, worldwide exports from New Hampshire rose 19 percent. Exports to China grew two times faster than exports to all countries combined.
As China grows at about three times more rapidly than the industrial economies, it becomes the fastest growing market in the world for goods made in other countries and, as a result, an important and vital export market for New Hampshire’s companies.
Evangelos Simos, chief economist of the consulting and research firm Infometrica Inc., is editor for International Affairs in the Journal of Business Forecasting and professor at the University of New Hampshire. Simos may be reached at email@example.com. Distributed by Infometrica Inc.