Surge of shipments to China boosts May N.H. exports

The nation’s output of goods and services, a measure of overall U.S. income, almost stalled in the first quarter of 2007, edging up by an annual rate of just 0.7 percent — the slowest pace in more than four years. Surveys of economic forecasters point to only a slight improvement in growth in the second quarter and a continuing softness in the rest of the year.

But the international picture is different. In the first quarter of 2007, the combined income of the member countries of the Organization for Economic Cooperation and Development (OECD) — the 30 richest economies in the world — was estimated to have grown at an annual rate of 2.4 percent. The two major European economies of the United Kingdom and Germany posted solid gains in economic growth of 2.8 and 2 percent, respectively.

In addition, economic activity indicators from emerging Asia, an important driver of the current global upswing, have continued to be strong, particularly from China and India. In the first quarter of 2007, Chinese income, adjusted for inflation, expanded by 11.1 percent, and in India by 9.1 percent, compared to a year ago.

The strong international growth translates into increasing foreign orders. As a result, exports are advancing faster than domestic sales.

At the national level, U.S. exports of goods, seasonally adjusted, jumped by 2.6 percent to an all-time high of $93.3 billion in May, from $90.9 billion in April. May’s highest level on record in national exports reflected increases in sales of capital goods, industrial supplies and consumer goods.

Following a decrease of 5 percent in April, exports of goods from the Granite State rose in May by 3.2 percent to $239.9 million, adjusted for seasonal variation.

Compared to a year ago, the latest snapshot in foreign sales reveals that New Hampshire’s exporting companies surpassed their performance in 2006. In May 2007, exporters shipped abroad $4 million, or 1.7 percent, more goods than in May 2006.

Buyers from five countries made up half of the overall foreign demand for New Hampshire goods in May. Consumers and businesses in Canada bought $52 million, or 22 percent, of all state exports, making Canada the largest export partner of New Hampshire companies.

Germany was second, accounting for 8 percent of all foreign sales.

A few years ago, China was an unimportant export market for New Hampshire’s companies. In May, Chinese companies bought $18 million of goods made in the state — an astonishing 21 percent increase from the same month of 2006. As a result, China ranked as the third-biggest trading partner of New Hampshire companies in May.

British buyers purchased $14 million of New Hampshire goods made in May, making the United Kingdom the state’s fourth-largest trading partner. The Netherlands ranked fifth, with purchases of $13 million.

Manufactured goods accounted for 87 percent, or $209.3 million, of all New Hampshire exports in May. That was 7.7 percent more than in the previous month.

Exports of the volatile non-manufactured goods fell 19.9 percent in May to $30.6 million. These shipments consist of agricultural goods, mining products and re-exports.

New Hampshire ranked 39th among the 50 states for exports in the first five months of 2007. In comparison to the first five months of 2006, foreign sales from New Hampshire’s companies, seasonally adjusted, increased by an annual rate of 3.0 percent compared with a 10.8 percent average for the nation as a whole.

Reflecting strong overseas growth and a weaker dollar, leading indicators point to good prospects for exporting companies in the next few months. According to the latest business survey conducted by the Institute of Supply Management, the nation’s supply executives continue to be optimistic about foreign demand in export markets.

Evangelos Simos, chief economist of the consulting and research firm Infometrica Inc., is editor for international affairs for the Journal of Business Forecasting, and department chair at the Whittemore School of Business & Economics at the University of New Hampshire. He can be reached at eosimos@infometrica.com.