More of world sees “Made in U.S.A.” label
American exports are now coursing their way around the world at a record level.
In a major shift from the past five years, the U.S. trade deficit, after stabilizing last year, is now shrinking. U.S. companies, faced with slower economic growth in their home market, are now targeting foreign buyers.
It doesn’t hurt to have the dollar sinking in value and a relatively strong global economy.
“Exports have suddenly become a key source of growth at a time when the economy is looking for any growth it can get,” says Mark Zandi, chief economist at Moody’s Economy.com.
The largest U.S. exports last year: nuclear-power plants, followed by electrical machinery, vehicles, airplanes and medical equipment.
Part of the improvement is due to state trade-development offices. That’s the case in North Dakota, for example, where its trade office has helped the state’s foreign exports grow by 87 percent since 2001. “Everyone on the staff is motivated and compensated by increasing export volume,” says Susan Geib, executive director in Fargo.
North Dakota is focusing on nations with “transitional” economies, such as Ukraine, which is now seeing substantial direct investment and is revamping its agricultural sector.
That focus has helped Fargo-based Amity Technology, which makes sugar-beet harvesters and other specialty farm equipment. Amity now exports nearly 60 percent of its production. Exports have gone from $4 million in 2001 to $40 million today.
“We can supply the entire U.S. market with six weeks of our production,” says Brian Dahl, a vice president. “The rest of it goes abroad.”
Another North Dakota company, DT&J, has been quick to react to legal changes in Europe that now mandate wheelchair access to buildings. It proudly notes that its product, called Roll-A-Ramp, is now used at Buckingham Palace and Oxford University.
Exports - now to 19 countries - have allowed the company to expand its employment in three years from four people to 12.
“Our domestic production pays for our fixed costs and our exports are our profits,” says Tom Kenville, president of the company.
The declining value of the dollar is attracting foreign companies that now see the U.S. as a manufacturing and re-export base. Jim Dillon, president of Passport Marine in St. Petersburg, Fla., is now negotiating with two Italian boat and yacht manufacturers to move their manufacturing to the U.S.
The export surge is causing some problems as well. Back in North Dakota, Dahl says his company is experiencing some wage inflation as it competes to keep its employees.
“Wages are up at a pretty rapid rate,” he says. “In fact, we’re investing in more capital goods because of a scarcity of employees.”
North Dakota isn’t the only place where labor is becoming more expensive. It’s true in China, which also grows sugar beets. So, this year, Dahl exported a harvesting machine to China. “I hope there will be more sales as they move to mechanical harvesting,” he says.