Foreign sales from Nevada
companies receded in August as global demand for locally made goods
retreated from its high levels in the previous months.
Sales abroad from Nevada exporters fell 3.6 percent in August, following an
8.7 percent rise in July.
The recent snapshot in international trade accounts brought Nevada’s foreign
sales to $221.5 million, seasonally adjusted, which is $8.3 million less
than the previous month. Exports remain high. August’s reading is the fifth
highest on record.
On an annual basis, last August’s reading in state exports shows gains in
foreigners’ demand for goods made in Nevada. In August, exporters sent
abroad $22.1 million, or 11.1 percent, more goods than in August of 2003. |
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Manufactured goods, an engine to export growth and a key creator of local
jobs, accounted for 75.5 percent of all state exports in August. Foreign
shipments from manufacturing companies went down sharply in August by 9.3
percent from the previous month to $167.3 million, adjusted for seasonal
variation.
Are Nevada manufacturers who do business abroad better off today than a year
ago? August’s shipments from state factories were $3.4 million, or 9.3
percent, higher than in August of last year.
The dominance of exports of manufacturing goods is a major source of
export-related factory jobs. The relationship between production,
employment, industrial mix and composition of trade exhibits the connection
between exports and jobs.
There are two stages of jobs generated by exports. The first stage involves
manufacturing jobs directly related to exports, such as workers in factories
producing the final product for the global markets.
The second stage includes factory jobs, which are indirectly related to the
final exports, such as workers who manufacture materials that enter into the
production of the exported products. This is known as the spillover effect
in the manufacturing sector.
In Nevada, for every 100 jobs in the first stage, there are 36 additional
jobs that support it in the second stage of production. Combining both
stages of export-related employment, one in every six manufacturing jobs in
the Silver State is tied to exports.
Exports of non-manufactured goods went up 19.7 percent in August to $54.2
million, seasonally adjusted. 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, exports of goods, seasonally adjusted, edged
down 0.1 percent in August to $67.4 billion from July. Increases occurred in
consumer goods and automotive parts and engines. Decreases were felt in
industrial supplies and materials, foods, feeds and beverages. Capital goods
were virtually unchanged.
Nevada ranked fourth in export growth among the fifty states during the
first eight months of this year. Compared with the same period in 2003,
foreign sales from Nevada’s companies, seasonally adjusted, increased by an
annual rate of 41.8 percent. National exports rose 13.2 percent during the
same period. Nevada exporters have fared three times better than the
national average so far this year.
What are the prospects for exports during the next twelve months for Nevada?
In its latest forecast for the global economy, the International Monetary
Fund noted that the global recovery remains solid, with economic growth in
2004 projected to reach its highest rate in nearly 30 years. IMF predicted
worldwide output, the driver of global demand for consumer goods and
business supplies, to jump by 5 percent this year and 4.3 percent in 2005.
Regarding economic prospects in major countries whose buyers fuel the demand
for state exports, the IMF predicts vigorous growth in Asia — particularly
China and Japan — growing momentum in Europe, and strong recovery in Latin
America.
More important for Nevada’s exporters, the IMF predicts buoyant
international trade activity for the rest of this year and in 2005.
Specifically, the volume of world trade is forecast to surge by 8.8 percent
in 2004 and 7.2 percent in 2005, following a 5.1 percent increase in 2003.
As a result, Nevada companies doing business abroad will continue to witness
strong export orders from their major foreign markets.
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