N.H. sees slowdown in jobs linked to exports
The combination of a lower dollar and the level of foreign buyers’ income resulted in a decrease in overseas sales from New Hampshire’s exporting companies in February.
Exports of goods made in the Granite State edged slightly down by 1.2 percent in February to $191.5 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.
However, in comparison to a year ago, New Hampshire exporters experienced gains in selling their products abroad this February. State companies sold overseas $11.9 million, or 6.6 percent, more goods than in February 2004.
February’s performance was fueled by trade in manufactured goods, which accounted for 79 percent of all state exports. Shipments abroad from New Hampshire factories decreased in February by 2.1 percent from the previous month to $151.4 million, adjusted for seasonal variation.
The dominance of exports of manufactured goods in New Hampshire is a major source of export-related local jobs. Foreign orders translate into increased production, which results in more hiring and a boost in state economic conditions.
What is the link between February exports of manufactured goods and factory jobs in the Granite State? Using official state statistics on the relationship between production, employment, industry mix, productivity and composition of international sales, Infometrica tracks monthly the connection between exports and jobs at the state level.
In February, 10.2 thousand manufacturing jobs were directly related to exports from New Hampshire. These jobs were in state manufacturing plants producing the final goods shipped overseas.
In addition, there were 6.4 thousand state manufacturing jobs indirectly related to the manufacturing of final exports. Those workers manufactured the materials needed for the production of the final exported goods. In other words, those are jobs in state industries that support New Hampshire exporting industries.
As a result, the total number of state manufacturing jobs tied to exports of manufactured goods was 16.6 thousand.
How does this compare to a year ago? In February of 2004, 17.7 thousand state jobs were tied to exports, implying that foreign buyers contributed to a loss of 1.1 thousand jobs from the same period last year.
In other words, although the value of exports went up since last year, the increase was not enough to compensate for the effect of higher prices and the gains in workers’ productivity which were driven by technological advancements. Jobs are added to produce more units and jobs are lost when new technology requires fewer workers to produce them.
How does New Hampshire fare among the 50 states in terms of manufacturing jobs related to exports? State factory jobs linked to exports of manufactured goods accounted for 20.5 percent of all manufacturing jobs in February. New Hampshire ranked 23rd in generation of export-related jobs in manufacturing industries among the states.
Exports of non-manufactured goods went up 2.2 percent in February to $40.1 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.
For the country as a whole, U.S. exports of goods, seasonally adjusted, edged up slightly by 0.1 percent in February to a record level of $71.2 billion. February’s export figures reflected increases in industrial supplies and materials and consumer goods; decreases occurred in capital goods and automotive vehicles, parts and engines. The slowdown in the growth of exports combined with a surge in imports generated the largest ever trade deficit in February.
What is the outlook for exports and export-related jobs?
The New York-based Economic Research Department of the Bank of Tokyo-Mitsubishi conducts a monthly foreign trade survey to evaluate freight levels of current and future shipments from trade centers, such as ports, around the country. In the most recent survey — conducted in February — 62 percent of the respondents expect exports to be higher over the next three months, a substantial improvement from 24 percent in the previous survey.
No change in export shipments over the next three months is expected by 38 percent of the trade experts polled in February, which is better than the 52 percent response in the previous month. More important, none of the participants expect a decline in exports over the next three months in the latest survey, compared with 24 percent anticipating a decline in January.
“Export activity is expected to pick up over the next three months,” concluded Ellen Beeson, director of the Economic Research Department at the Bank of Tokyo-Mitsubishi. The bank’s index of future export conditions hit a trend high in February. In comparison to future trends in imports, the results of the survey “indicate export growth will outperform import growth in the future,” Beeson added.
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.