The latest numbers on trade around the world show that in the first five months of 2014, the value of world merchandise exports rose 2 percent to $4.5 trillion from the same period in 2013.
The trade figures on exports, released by the World Trade Organization, indicate that, so far this year, the United States ranked the second-largest exporter in the world with foreign sales hitting $665 billion, which is $19 billion more than in 2013.
China was the world’s leading exporter, selling $875 billion worth of goods abroad in the first five months of 2014. Germany, the export engine of the European Union, maintained its third-place standing by posting $639 billion in foreign sales so far in 2014. Japan was ranked the world’s fourth-largest exporter, selling $284 billion of merchandise this year. The four-country combined value of merchandise exports accounts for 54 percent of all exports in the world in the first five months of 2014.
Looking at the state level, the latest snapshot of international trade numbers shows foreign sales of goods made in Michigan leaped in May by 5.7 percent, after a decrease of 2.4 percent in April. Michigan's exporting companies sold overseas just more than $5 billion in goods in May, adjusted for seasonal variation — a statistical technique that smoothes out monthly fluctuations for factors such as the number of working days in a month and thus reveals a consistent picture of monthly trends.
Compared with a year ago, Michigan's exporting companies this May fell behind their export performance in May 2013 by $116.4 million, or 2.3 percent.
Michigan's foreign sales in May reflected the mix of trends in foreigners’ demand for goods made by different industries. Overseas shipments from Michigan's manufacturers — which accounted for 83 percent of all exports — increased to $4.15 billion, seasonally adjusted, or 7.4 percent more than May’s level of factory shipments.
Exports of non-manufactured goods went down 2 percent in May to $865.6 million, adjusted for seasonal variation. This group of foreign sales 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.
Merchandise exports for the country as whole rose by 1.2 percent in May to $136.7 billion, adjusted for seasonal variation. So far this year, national exports of goods edged up by an annual rate of 2.1 percent from the same period a year ago.
How does Michigan match up to other states in export growth in 2014? In the first five months of the year, foreign sales from Michigan's companies — seasonally adjusted — decreased by an annual rate of 0.4 percent compared with the first five months in 2013. As a result, Michigan ranked 27thamong states in export growth so far this year.
What are the prospects for growth in the world economy for the rest of this year and in 2015?
In its July update of the2014 World Economic Outlook of the International Monetary Fund cut its global growth outlook for this year and next. According to the report, global economic recovery continues, but it remains a weak recovery; indeed, a bit weaker than we forecast in April.”
IMF’s latest outlook predicts economic growth in the industrial countries to register 1.8 percent in 2014, weaker than the April 2014 projection of 2.2 percent. In 2015, growth in industrial countries is expected to slightly accelerate at an annual rate of 2.4 percent.
The international organization forecasts economic growth for emerging and developing countries — the group includes China, India and Brazil — to hit 4.6 percent in 2014 and 5.2 percent in 2015.
IMF forecasts the volume of global trade to grow 4 percent in 2014 and then to accelerate to 5.3 percent in 2015, compared with an increase of 3.1 percent in 2013 and 2.8 percent in 2012.
IMF’s outlook predicts worldwide imports of the industrial countries to edge up by 3.5 percent in 2014. However, worldwide imports of emerging and developing countries are forecast to increase by 4.7 percent in 2014.
Consequently, emerging and developing countries will be driving foreign demand for Michigan's exporters contributing to local production and jobs more than the high income industrial countries.
Evangelos Simos is chief economic adviser of the consulting and research firm e-forecasting.com. He can be reached at firstname.lastname@example.org.