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Merchandise exports are a vital part of New Hampshire'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, 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 goods made in New Hampshire.
Following monthly gains of 4.7 percent in April, exports of goods from the
Granite State were unchanged in May at $203 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. May's reading
was the third highest level in state exports since August 2001.
Compared to a year ago, the latest snapshot in foreign sales reveals that
New Hampshire's exporting companies fell slightly behind their performance
in 2004. In May of this year, state exporters shipped abroad $5.4 million,
or 2.6 percent, less goods than in May of last year.
At the national level, US exports of goods, seasonally adjusted, were almost
flat, edging slightly down by 0.1 percent to $74.5 billion in May from $74.6
million in April — which had been the highest level on record. The latest
near-record performance in national exports 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 New Hampshire's
trade, accounting for 80 percent of all state exports. In May, purchases by
foreigners of goods made in the Granite State's factories held nearly
steady.
International buyers paid in May $161.3 million, adjusted for seasonal
variation, for all types of goods manufactured in New Hampshire, which was
slightly less than in the previous month.
Five exporting industries contributed about three-fourths to all state
exports in May.
Machinery — mainly office equipment, personal computers and other high tech
products — was the state's largest export earner, generating $59 million in
foreign sales in May. Electrical equipment — mostly telecommunication
products and integrated circuits — was the state's second largest exporting
industry, creating $58 million of export revenues. Medical instruments were
the third-largest exporting industry, with shipments abroad of $26 million
in May.
The combined foreign sales of these three industries totaled $143 million,
which was 70 percent of all state exports in May. Plastics and iron and
steel followed in the list of the top five exporting industries.
Exports of the volatile non-manufactured goods went up 6.1 percent in May to
$41.7 million, adjusted for seasonal variation. This group of foreign
shipments 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.
The dominance of manufactured goods in the state's exports provides a
momentous source of export-related jobs. There is a fundamental link between
state exports of manufactured goods and export-related jobs in the Granite
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 and competitiveness as well
as trends in and the composition of international sales.
May's foreign sales from New Hampshire's manufacturing plants supported a
total of 17.8 thousand factory jobs. Job creation in the state's
manufacturing industries consists of employment generated directly from the
production of the exported goods as well as indirectly from employment in
supporting industries which supply exporting companies with parts, tools and
equipment needed by the exporters.
In May, 10.9 thousand manufacturing jobs in New Hampshire were directly tied
to exports, and another 6.9 thousand jobs were indirectly supported by
exports of manufactured goods.
More important, manufacturing production sparks off 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. Thus, many jobs are generated by exports of
manufactured goods.
A convenient way to look at the link of employment between industries is the
number of non-manufacturing jobs supported by every 100 manufacturing jobs.
In New Hampshire, 104 non-manufacturing 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 — New Hampshire ranked thirty fifth among the fifty states
in the first five months of 2005. In comparison to the first five months of
2004, foreign sales from New Hampshire's companies, seasonally adjusted,
increased by an annual rate of 7.3 percent compared with a 10.6 percent
average for the nation as a whole.
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 of this
year, but stayed above 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" and
not a recession.
Most important, with respect to international trade, the experts polled by
the Ifo Institute expect both exports from and imports to their countries to
increase in the next two quarters, compared to the current trends.
Consequently, the global trade outlook is favorable and will result in
growing exports for New Hampshire's companies for the rest of this year.
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