Source: infometrica.com While technological
improvements and quality enhancements provide an advantage in selling goods
abroad, export success is still determined by how much money foreign buyers
have and how weak the dollar is against the buyers’ national currency.
New Hampshire exporters have found the dollar’s decline a welcome help
against foreign competitors and are pleased with its recent lows as a boost
to foreign demand for their products.
However, in addition to better competitive international prices, foreign
demand for domestic goods is chiefly determined by the ability of the
consumers to buy them, particularly the growth in foreigners’ income. For
instance, if Europe is in recession with high levels of unemployment,
European consumers will be unable to buy as many goods — foreign or domestic
— as before, despite a decline in prices.
In its recent report, the Organization for Economic Cooperation and
Development (OECD) estimated that economic growth in the industrial
countries accelerated by an annual rate of 3.6 percent in 2004, up from 2.2
percent in 2003 and 1.6 percent in 2002. The Paris-based global economic
think tank also announced that global trade is estimated to have advanced by
an annual rate of 9.5 percent in 2004, about twice the rate of 2003.
Source: infometrica.com
 As exporting companies
sell most of their goods to consumers and companies in the industrial
countries, the strengthening of economic activity abroad has made them feel
a climb in global demand for their products. Consequently, in the first 10
months of this year, national exports of goods, adjusted for seasonal
variation, increased 13.6 percent from the same period in 2003, which is
nearly 4 percent higher than the growth in the world’s trade volume.
The favorable foreign conditions have spread across the nation’s exporters
and have reached New Hampshire. During the January-October period, exports
of goods from the Granite State increased by an annual rate of 20.5 percent
from the same period in 2003, which is nearly 4 percentage points higher
than the national average. New Hampshire ranked 11th in export growth among
the 50 states so far this year. Source: infometrica.com
 According to recent international trade statistics, exports from New
Hampshire’s companies pulled back by 5.2 percent in October, following a
surge of 12.2 percent in September. At their October mark, foreign sales
registered at $200.8 million, seasonally adjusted, which is the
second-highest level in about three years.
It also is important to
note that on an annual basis, state companies last October shipped abroad
$27.7 million, or 16 percent, more goods than in October of 2003.
October’s export performance mostly reflected trends in manufactured goods
trade, which accounted for 83 percent of all sales abroad. Foreign shipments
from New Hampshire’s factories increased in October by 0.9 percent from the
previous month, to $167.3 million, adjusted for seasonal variation.
Exports of non-manufactured goods, also adjusted for seasonal variation,
went down 27.2 percent in October to $33.5 million, dragging down overall
exports. 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.
2005 prospects
For the country as a whole, U.S. exports of goods, seasonally adjusted, rose
0.3 percent in October to $69.4 billion — an all-time record. The latest
increase in national exports was driven by record sales in industrial
supplies and materials. Exports of capital goods also increased, while
consumer goods sales remained virtually unchanged.
What are the prospects for global economic growth next year, which will
ultimately determine the demand for New Hampshire’s foreign sales and
export-related jobs? In its twice-yearly outlook, OECD predicts solid growth
for its members, the club of the 30 richest nations.
The research organization forecasts 2.9 percent economic growth in 2005 and
3.1 percent in 2006. Most important, OECD predicts world trade to grow by 9
percent in 2005 and 9.5 percent in 2006. These growth rates are nearly three
times faster than the rate of overall economic growth, implying good export
opportunities for American companies doing business abroad.
These projections on global growth and trade suggest an increase in export
orders for New Hampshire companies. Driven by foreign demand, production
activity at the state level is expected to rise and, as a result, more
export-related jobs will be generated over the next two years.
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