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New Hampshire exports receded in August as global demand for locally-made
goods retreated from its high levels in the previous months.
Shipments abroad from New Hampshire exporters pulled back by 2.1 percent in
August, following an 8.7 percent rise in July. New Hampshire’s foreign sales
were $186.8 million, seasonally adjusted, which was $4 million less than the
previous month.
Despite this decline exports still remain high; August’s reading is the
third highest mark in three years.
On an annual basis, last August’s volume in state exports shows solid gains
in foreigners’ demand for goods made in New Hampshire. In August of this
year, exporters sent abroad $34.2 million, or 22.4 percent more goods than
in August of 2003.
Manufactured goods, an engine to export growth and a key creator of local
jobs, accounted for 83.6 percent of all state exports in August.
August’s shipments from state factories were $34.3 million, or 5.2 percent,
higher than in August of last year.
The dominance of exports of manufacturing goods is a major source of
export-related factory 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 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
within the manufacturing sector.
In New Hampshire, for every 100 jobs in the first stage, there are 63
additional jobs that support it in the second stage of production. Combining
both stages of export-related employment, one in every four manufacturing
jobs in the Granite State is tied to exports.
Exports of non-manufactured goods went up 17.7 percent in August to $30.6
million, seasonally adjusted. This group of shipments abroad consists of
agricultural goods, mining products, and re-exports.
For the country as a whole, U.S. 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.
Exports growth is a convenient way to look at the strength that state
companies gain access to worldwide markets.
New Hampshire ranked 15th in export growth among the 50 states during the
first eight months of this year. Compared to the same period in 2003,
foreign sales from New Hampshire’s companies, seasonally adjusted, increased
by an annual rate of 19.5 percent. National exports rose 13.2 percent during
the same period.
What are the prospects for exports over the next twelve months for New
Hampshire? In its latest forecast for the global economy, the International
Monetary Fund (IMF) 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 New Hampshire’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, New Hampshire companies doing business abroad should continue
to witness strong export orders.
Maine also took a hit in August.
Foreign sales from Maine’s companies plunged 17 percent in August, the third
consecutive monthly decline. The recent reading in international trade
accounts brought Maine’s foreign sales to $145.2 million, seasonally
adjusted, which is $29.7 million less than the previous month.
In comparison to a year ago, Maine exporters sent abroad $26.7 million, or
15.5 percent, fewer goods than in August 2003.
The recent decline in state exports was widespread. Manufactured goods went
down sharply in August by 13.6 percent from the previous month.
Exports of non-manufactured goods went also down 29.4 percent in August.
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