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Sluggish
economic conditions in continental Europe, Japan and Canada have not been enough
to derail the expansion of foreign sales from Nevada’s companies.
Vigorous growth in the rest of the world — particularly Asia and Latin
America — combined with a weak dollar, have sustained a strong global
appetite for goods made in Nevada, which fuels company sales and generates
export-related jobs.
 In April, exports of goods from the Silver State rose $2.8 million, or 0.8
percent, to $335 million, adjusted for seasonal variation — a statistical
process that smooths monthly performance for factors such as the number of
days in a month and holidays. It was the second highest mark on record.
On an annual basis, the latest appraisal of international sales shows that
Nevada’s companies surpassed their performance compared with a year ago. In
April of this year, state exporters shipped abroad $89.8 million, or 36.7
percent, more goods than in April of 2004.
Foreign sales of manufactured goods played a key role in April’s trade
performance by contributing 78 percent to all state exports. Shipments
abroad from Nevada factories decreased in April by 2.4 percent from the
previous month to $261.2 million, adjusted for seasonal variation.
There are significant benefits that the economy of Nevada 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.
Manufacturing companies that become exporters not only increase their sales
from the addition of new markets, but also generate new jobs tied to the
production of foreign sales. There is a significant link between state
exports of manufactured goods and export-related jobs in the Silver State.
Infometrica, Inc. gauges monthly the relation between state exports, jobs
and economic activity by tracking the historical links of incomes,
production, jobs, industrial mix, productivity, competitiveness as well as
trends in and composition of international sales.
Exports of goods from plants in Nevada supported a total of 20,800
manufacturing jobs in April. A year ago, there were 14,700 manufacturing
jobs tied to exports.
Expanding to overseas markets is an important factor for manufacturing jobs.
The state’s correlation of sales to employment implies that one in every two
factory jobs in the Silver State depends on the volume of foreign sales of
manufactured goods.
Manufacturing jobs tied to exports in April came from two levels of
production activities. They were in plants from where the products were
shipped directly to the international markets and in plants where their
products were not sold abroad but they were needed in making the exported
goods.
In April, 15,300 factory workers in Nevada were directly supported by
exports of manufactured goods making the final products sold overseas. There
were also 5,500 additional factory jobs tied indirectly to Nevada 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. As a result, manufacturing exports sustain jobs in other
industries too. 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 25,000
jobs in non manufacturing companies in Nevada. 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 14.1 percent in April to
$73.8 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, 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.
The April record performance in national exports was a major contributor to
economic growth and jobs. So far this year – January to April — U.S. exports
registered $288 billion, an 11 percent surge from the same period in 2004.
How did exporting companies from Nevada fare in foreign sales growth in the
first four months of 2005, which in turn impacts jobs and overall economic
activity in the state? Nevada ranked second in export growth among the
states so far this year. In comparison to the first four months of 2004,
foreign sales from Nevada’s companies, seasonally adjusted, increased by an
annual rate of 57.3 percent.
Will export companies see improved sales in the international markets over
the summer months? 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.
No change in export shipments over the next three months is expected by 57
percent of the trade executives surveyed in April. Only 10 percent of the
survey participants expect a decline in exports over the next three months
in the latest survey.
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. Their 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 during the next three months.
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