Vermont ranked sixth in export growth

Vermont Business Magazine, Mar 01, 2005 by Simos, Evangelos Otto

With solid gains in foreign demand for locally made goods at the tail end of the the year, state exports were much stronger overall during 2004 than in recent years.

Foreign sales of goods from Vermont's companies, adjusted for seasonal variation, surged $32.2 million, or 12.4 percent, in December to $290.8 million, following a dip of 21.2 percent in November. December's reading was the third highest monthly level since February 2001.

For the full 2004 calendar year, state exports increased by $640 million from 2003 to $3.3 billion. Last year's sales abroad are the result of the undergoing improvement in global economic conditions and the fall in the value of the dollar. A weaker currency makes locally produced goods less expensive and consequently more competitive in international markets.

Demand for manufactured goods drove overall sales from Vermont's exporting companies. Last December, foreign shipments from state factories accounted for 67 percent of all sales abroad.

Exports of manufactured goods rose sharply in December by 23.9 percent from the previous month to $195 million, adjusted for seasonal variation. At last December's mark, exports of manufactured goods were $8.5 million, or 4.2 percent, lower than in December of 2003.

Was 2004 a good year for state manufacturers doing business abroad and, consequently, factory jobs tied to exports? For all of 2004, exports of made-in-Vermont goods surged by 33.2 percent from 2003 to $2.2 billion. For the nation, exports of manufactured goods rose 11.3 percent to their highest annual level on record.

Exports of non-manufactured goods went down 5.4 percent in December to $95.7 million, also 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.

In a state perspective, how did Vermont's exporters fare in selling their products abroad during 2004? The state's export performance translates to an annual growth rate in foreign sales of 24.4 percent for the entire year 2004, compared to a gain of 4.2 percent in 2003. As a result, Vermont ranked sixth among the fifty states in export growth in 2004.

In a global perspective, US exports of goods rose by 13.2 percent during 2004, about three times faster than in 2003, hitting the highest annual level on record. For the world's major twenty-three industrial countries, the combined volume of their exports is estimated to have jumped by 15.6 percent in 2004. Vermont exporters outperformed all industrial countries and the nation in export growth during 2004.

What is the global economic outlook for 2005 which will determine international trade and ultimately the demand for goods made in Vermont? Forward-looking indicators signal that the international economic outlook - vital to export-related jobs in Vermont - is expected to improve over the next three quarters.

The Organization for Economic Cooperation and Development (OECD), a highly-respected Paris-based thinktank whose members include the world's 30 richest countries, reported this month that the group's composite leading economic indicator shows improved performance in its recent reading.

In particular, OECD's early warning indicator for the most advanced countries in the world - which tracks economic conditions nine months in advance - rose again in December. More important, the indicator's annual growth rate - designed to provide early signals of changing directions in global economic activity between expansions and slowdowns accelerated for a second month in a row.

These new numbers confirm the general view that the global economic expansion will continue in 2005.