While overall U.S. exports of goods and services are still on track to double in five years, the Commerce Department trade figures released today show that both manufacturing and services exports have dropped below the 15 percent annual growth path needed to double in five years.
Overall exports of goods and services through October were 15.5 percent larger than in January-October 2010. Manufactured goods exports, however, were up by a lesser amount – a 12.7 percent increase over the year earlier period. While that is still a good growth rate, it is below the path needed to double in five years.
Services exports are also below the 15 percent path, being up 10.6 percent over the year-earlier period, barely into double digit growth. The manufacturing and services export figures are troublesome, as these two sectors account for over 80 percent of overall U.S. exports of goods and services.
The overall export growth rate is being sustained by agricultural exports, up 24 percent, and mineral fuels exports, up 62 percent. It is doubtful whether the 15 percent overall figure can be sustained into the future unless the growth rates for the huge manufactured goods and services sectors pick up.
Manufactured goods imports through October grew at exactly the same rate as exports – 12.7 percent. However, since imports are significantly larger than exports, an identical growth rate produces a larger dollar growth figure for imports than for exports. Year-to-date growth was $382 billion for exports, $339 billion for imports, and $43 billion for the trade deficit.
A slowing pattern is evident in both manufactured exports and imports. On a seasonally adjusted basis, October manufactured goods exports were $95.3 billion, down 2.9 percent from September, and almost exactly the same dollar amount as in March 2011.
October manufactured goods imports were $131 billion, down one percent from September, and the same dollar amount as in January 2011. The slow growth in economies both at home and in major markets abroad is evident in these figures.
U.S. Free Trade Agreement (FTA) partners continued to be, as they have been for almost four years, the source of a manufactured goods surplus for the United States. The latest available figures for 2011 indicate that American manufacturers are on track to register a $40 billion surplus in trade with FTA partners this year – in sharp contrast to the deficit with the rest of the world.
Frank Vargo is vice president for international economic affairs, National Association of Manufacturers.
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