N.H. export growth fuels gains in local jobs
Sluggish economic conditions in continental Europe, Japan and Canada have not been enough to derail the expansion of foreign sales from New Hampshire’s companies.
Vigorous growth in the rest of the world — particularly in Asia and Latin America — combined with a weak dollar have sustained a strong global appetite for goods made in New Hampshire.
In April, exports of goods from the Granite State rose $8.3 million, or 4.3 percent, to $201.6 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. It was the third-highest level in the last 45 months.
On an annual basis, state exporters shipped abroad $33.4 million, or 19.9 percent, more goods than in April of 2004.
Foreign sales of manufactured goods played a key role in April’s trade performance by contributing 81 percent to all state exports. Shipments abroad from New Hampshire factories increased in April by 0.2 percent from the previous month to $163.3 million, adjusted for seasonal variation.
There are significant benefits that the economy of New Hampshire receives from exports of manufactured goods. Companies that participate in international markets use advanced technologies, engage in research and development and invest in worker training so that their production process delivers world-first or U.S.-first products in global competition.
Exports of goods from plants in New Hampshire supported a total of 17,500 manufacturing jobs in April. A year ago, there were 17,300 manufacturing jobs tied to exports. Consequently, export activity of state manufacturers generated a gain of 200 manufacturing jobs from last year in New Hampshire, despite the improvements in labor productivity that call for fewer workers in making the same volume of goods.
The state’s correlation of sales to employment implies that one in every five factory jobs in the Granite State depends on the volume of foreign sales of manufactured goods.
In April, 10,700 factory workers in New Hampshire were directly supported by exports of manufactured goods. There also were 6,800 additional factory jobs tied indirectly to New Hampshire exports of manufactured goods in April. Those workers made parts or machinery for the manufacturing of exported goods.
Manufacturing activity triggers ripple effects in a wide range of other industries. For instance, a foreign sale requires transportation of goods to a port of exit such as a seaport or airport, and the involvement of a bank for the completion of an international foreign exchange transaction.
Accordingly, April’s exports of manufactured goods generated another 18,100 jobs in non-manufacturing companies in New Hampshire. The businesses and their workers that benefited from overseas sales of manufactured goods were mainly in wholesale and retail trade, transportation, business services and to a lesser degree in utilities, mining and agriculture.
Foreign sales of non-manufactured goods went up 26.5 percent in April to $38.3 million, 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.
New Hampshire ranked 32nd in export growth among the 50 states so far this year. In comparison to the first four months of 2004, foreign sales from New Hampshire’s companies, seasonally adjusted, increased by an annual rate of 10.2 percent.
For the country as a whole, exports of goods, seasonally adjusted, rose to a record $74.5 billion, a 4.2 percent jump from March’s volume, which had been the previous record. The latest solid gains in national exports were driven by sales of industrial supplies as well as exports of foods, feeds and beverages, which hit an all-time high; exports of capital goods — machinery and equipment used by businesses — also climbed in April to their highest level since February 2001.
From January through April 2005, U.S. exports registered $288 billion, an 11 percent surge from the same period in 2004.
Forward-looking indicators point to an improving outlook for exports. According to a recent monthly foreign trade survey conducted by the New York based Economic Research Department of the Bank of Tokyo-Mitsubishi, the prospects for shipments abroad are favorable. Thirty-three percent of the surveyed experts – executives from air freight carriers, seaports and trucking firms in trade centers around the country — expect exports to be higher over the next three months in comparison to April levels when national exports hit a record.
The overall assessment of the survey indicates that “export activity is expected to remain healthy over the next three months,” concluded Ellen Beeson, U.S. macro economist at the Bank of Tokyo-Mitsubishi. The bank’s index of future export conditions registered 57.1, signaling a continuation in exports growth for a third month in a row. (A reading above 50 in the index indicates an increase in exports over the next three months.)
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 firstname.lastname@example.org. Distributed by Infometrica Inc.