February manufactured goods exports grew only 2.4 percent at an annual rate from January, while manufactured goods imports increased at an annual rate of 18.9 percent. As a result, the manufactured goods deficit seasonally adjusted, grew to $41.9 billion from January’s rate of $40.7 billion.
On a year over year basis, comparing February 2011 with February 2010, manufactured exports were up 11.6 percent, marking the third month in a row of growth lower than the 15 percent annual rate of increase needed to achieve the goal of doubling exports in five years. The graph below illustrates this point.
Imports of manufactured goods were up over 17 percent from February 2010, contributing to a growing deficit. Autos, capital goods, and consumer goods imports all showed rapid growth.
Manufactured goods exports under-performed the overall growth of goods and services, which were up 14.2 percent, driven largely by the blistering growth of agricultural exports, up 30 percent over February 2010.
U.S. exports of capital goods, the largest category of manufactured goods exports, showed particular lack of energy. February capital goods exports stood at $39 billion, down slightly from January’s $39.3 billion, and hardly changed from $38.8 billion exported in July 2010. Nineteen categories of capital goods exports declined in February, while 11 categories grew. The only significant growth, was in civilian aircraft and aircraft engines.
February’s figures underscore the need for an effective program to double exports, and should prompt the Administration to move quickly on reducing barriers to U.S. exports, particularly by sending the three pending trade agreements – Colombia, Panama, and Korea – to Congress for quick passage and implementation. The Administration then needs to move rapidly to conclude other export-enhancing trade agreements to open more foreign markets to U.S. exports.
The existing U.S. bilateral trade agreements, continued to be the brightest spot in the manufactured goods trade picture. The latest data for 2011 show a continuation of the manufactured goods trade surplus with U.S. trade agreement partners, a surplus that has accumulated to about $70 billion over the past three years.
Frank Vargo is vice president of international economic affairs at the National Association of Manufacturers.
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