Tim Pawlenty and Barack Obama may not agree on much, but they both think that exports are critical to getting the economy growing. If that’s the test, Minnesota has lots of room for improvement, based on the most recent state export numbers released by the Minnesota Department of Employment and Economic Development.
Minnesota companies shipped $3.9 billion in products to markets outside the United States in the fourth quarter, according to DEED. Exports fell by 6.3 percent, or $263 million, from the same quarter in 2008, while U.S. exports fell 2.2 percent during that period.
The trend, however, is definitely improving, with the rate of decline slowing dramatically from a breathtaking 19 percent drop in the first two quarters of the year and a more than 15 percent drop in Q3.
For all of 2009, Minnesota’s manufactured exports totaled $14.6 billion, down $2.7 billion from 2008, a 15.5 percent decrease while U.S. exports fell 18.3 percent.
“Minnesota manufacturers have been staring straight in the face of an economic slowdown that has disrupted business globally,” said DEED Commissioner Dan McElroy in a prepared release. “However, our export markets, particularly in Asia, are showing signs of recovery, and exports have increased in four of our state’s 10 largest markets.”
Minnesota’s largest manufactured export category, computers and electronic equipment, declined 17 percent from a year ago to $901 million, compared with a 2.3 percent decline nationwide.
Don Martin, president of St. Paul-based Lion Precision, for example, described last year as “a total disaster.” He said his January 2009 business was down substantially and then “February fell off a cliff,” with shipments sliding about 60 percent from the previous year.
Lion’s OEM (original equipment manufacturer) customers include computer hard-drive and semiconductor-equipment makers, primarily in Europe and Israel. They incorporate Lion’s sensors into their products sold to Asian manufacturers. That OEM market was particularly hard hit in the recession, Martin said, as Asian computer manufacturers retrenched.
Exports totaled 55 percent of his sales in 2008, which he described as his best year. Exports declined to 45 percent of sales in 2009, and he expects it to be “about half” of sales this year as he “hopefully” gets back to 2008 volumes by the end of the year.
Among all regions, Minnesota exports to Asia experienced the strongest gains, up 11 percent to $1.2 billion, including China ($363 million, up 19 percent), Japan ($226 million, up 6 percent), Korea ($129 million, up 20 percent) and Australia ($112 million, up 31 percent).
Exports to Vietnam exploded 158 percent to almost $13 million. The Minnesota Trade Office will lead a business development mission to Vietnam in May to help state companies explore trade opportunities in the region.
Other Asian markets with strong export performances were Malaysia, Thailand and Taiwan. These gains helped blunt a 51 percent decline in the Philippines to $99 million and a 22 percent decline in the European Union to $957 million, according to DEED.
Exports to Canada, Minnesota’s largest export market, declined 1 percent to $1.04 billion.
Transportation equipment exports, the third-largest category of Minnesota exports, grew 27 percent to $527 million, offsetting some of the declines elsewhere.
Duluth-based Cirrus Aircraft recently announced that its 2010 outlook is improved, based in part on export sales. “Increased global expansion in 2009 is paying significant dividends for Cirrus in 2010 as economies around the world recover … Year-to-date, total new aircraft deliveries are evenly split between the U.S. and export markets,” the company said in a press release last week.
Loram Inc., a Hamel-based railroad maintenance equipment manufacturer, announced that it operations have “greatly increased international shipments in 2009 and look forward to another busy year in 2010,” as they announced shipments to India, Colombia, Brazil and Germany.
Both Gov. Pawlenty, who led several trade missions to Asia and Latin America during his tenure, and President Obama, who called for a doubling of exports in the next five years, have made export growth a priority.