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Merchandise exports are a vital part of Nevada’s production activities and therefore influence overall state economic development and jobs.
The state’s economic prospects continued to look lively, as international
trade data showed that exports are holding up at high levels despite a
recent pullback, which translates to encouraging news for export-supporting
local jobs.
As the global economy is growing, consumers and businesses in overseas
markets have maintained a strong appetite for Nevada-made goods.
Source: infometrica
Following monthly gains of 0.4 percent in April, exports of goods from the
Silver State declined in May by 7.7 percent, to $307.0 million, adjusted for
seasonal variation — a statistical process that smoothes monthly performance
for such factors as the number of days in a month and holidays.
It was a natural pullback from the last month’s high level when exports hit
the second highest mark on record.
Compared with a year ago, the latest snapshot in foreign sales reveals that
Nevada’s exporting companies surpassed their performance in 2004. In May
2005, state exporters shipped abroad $72.8 million, or 31.1 percent, more
goods than a year ago.
At the national level, exports were almost flat, edging slightly down by 0.1
percent, to $74.5 billion, from April’s which highest level on record. The
latest near-record performance reflected increases in sales of consumer
goods and industrial supplies, as well as exports of foods, feeds and
beverages, which all hit an all-time high.
State manufacturing companies were a major contributor to Nevada’s trade
performance. International buyers paid $246.9 million in May for all types
of goods made in the Silver State.
Exports of the volatile nonmanufactured goods fell 22.1 percent, to $60.1
million. This group of foreign shipments consists of agricultural goods,
mining products and re-exports — foreign goods that entered the state as
imports and are exported in substantially the same condition.
Five exporting industries contributed 87 percent to all state exports.
Precious metals — mainly gold — was the largest export earner, generating
$150 million in foreign sales. Metals were half of all foreign sales, up 73
percent from a year ago.
Electrical equipment, mostly integrated circuits, was the second-largest
exporting industry, creating $41 million of export revenues. Gaming
equipment was third, with shipments of $35 million.
The combined foreign sales of these three industries totaled $226 million,
or three-fourths of all exports. Machinery and medical instruments were
next.
The dominance of manufactured goods provides a momentous source of
export-related jobs. May’s foreign sales from Nevada’s manufacturing plants
supported 20,000 factory jobs. Manufacturing job creation is employment
generated directly from the production of the exports, as well as indirectly
from employment in supporting industries.
In May, 14,700 manufacturing jobs in Nevada were tied directly to exports
and another 5,300 were supported indirectly by exports.
More importantly, manufacturing production sparks ripple effects in other
industries. Wholesale and retail trade, transportation, business services
and — to a lesser degree — utilities, mining and agriculture, are influenced
by manufacturing activity and thus many jobs are generated.
In Nevada, 120 nonmanufacturing jobs were generated by each 100
manufacturing jobs tied to exports in May.
Looking at export growth — a depiction of how fast state companies penetrate
foreign markets — Nevada ranked second among the 50 states in the first five
months of 2005. In comparison to the first five months of 2004, foreign
sales from Nevada’s companies rose at an annual rate of 51.6 percent, versus
a 10.6 percent average for the nation .
Will export orders from foreign merchants continue to grow in the rest of
the year? It depends on the economic vitality in the rest of the world.
The recent survey of about 1,100 executives from 91 countries conducted by
the German Ifo Research Institute and the International Chamber of Commerce
provides evidence that the global economy has entered a “cooling-down”
phase.
Derived from the opinions of the experts polled, the Institute’s global
economic climate indicator declined in the second quarter, but stayed higher
than its long-term average level, signaling a slowdown in business activity.
Looking forward, business executives expect economic conditions to further
deteriorate in the next six months, resulting in a global “soft patch” — but
not a recession.
And with respect to international trade, the experts expect both exports
from and imports to their countries to increase in the next two quarters,
compared with the current trends.
Consequently, the global trade outlook is favorable and will result in
growing exports for Nevada’s companies the rest of this year.
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