U.S. in Manufacturing, Least Intense Among Major Exporters

By September 30, 2009General, Trade

John Engler, president of the National Association of Manufacturers, sat down with reporters and columnists yesterday for a discussion of the economy and the elements that would comprise a “growth strategy” — infrastructure, energy and exports.

Tim Aeppel of The Wall Street Journal wrote about the export piece of the conversation, “NAM Chief: U.S. Needs to Stimulate Exports.” Excerpt:

Calculations by the nation’s largest manufacturing trade group show the U.S. ranks last among the world’s 15 largest manufacturers in terms of “export intensity.” Rather than measuring raw export numbers, export intensity gauges the proportion of the nation’s manufacturing production that is exported.

Export powerhouses Germany and Taiwan top the list. But others, including Brazil, Turkey and Spain, also exceed the U.S. in terms of the proportion of their goods that are exported.

“If we could simply get exports up to the world average — which is a little more than two times where it is — we could eliminate the trade deficit,” says Mr. Engler.

Here’s the handout. The methodology is in the extended entry.

The slide and calculations are by Frank Vargo, the NAM’s vice president for international economic affairs.

The manufacturing export intensity data are derived by taking manufactured goods exports and dividing by manufacturing value-added. Value-added defines the size of a country’s manufacturing sector, and the data are available for most countries.

The export/value-added ratio provides the relationship between exports and value-added. The U.S. ratio is used as the base, and the ratios for the other countries are divided by that figure. If the figure is greater than one, that means the country’s proportion of exports to value added is larger than the U.S. Indexing the data to the U.S. figure makes it easy to see if others export proportionately more or less than we do. The data also permit a figure for the world, including all countries – not just the top 15. That ratio is 2.2, meaning that on average, countries export more than twice as much of their manufacturing value-added as the United States.

The manufactured goods export data are obtained from the Global Trade Information Service, which is a service that obtains the actual trade data from individual countries and mounts the data in a consistent and user-friendly fashion. The manufacturing value-added data are obtained from the World Bank. The data are for 2005, which is the latest available.

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