Non-industrial countries will be Michigan’s best customers


The latest international trade indicators for Michigan show that in the last month of 2012, foreign sales fell to $4.95 billion, from $5.12 billion in November. The figures are adjusted for seasonal variation, a statistical process that smoothes out volatility in the monthly state numbers for factors such as the number of days in a month and holidays, and thus brings them in line with national indicators.

December’s 3.3 percent decrease in state exports at the tail end of 2012 followed an increase of 6.4 percent in the previous month.

Compared with international sales a year ago, in December 2012 exporters from the Wolverine State sold abroad goods worth $579.1 million, or 13.2 percent more than in December 2011.

Was 2012 a good year for Michigan's exporting companies and, consequently, a good year for local jobs related to exports? Overall, exports of goods made in Michigan increased $6.1 billion for the year, to $56.9 billion from $50.8 billion in 2011.

How did Michigan's exporters fare in selling their products abroad during 2012? The state’s export performance translates to an annual growth in foreign sales of 12 percent for the entire year, compared to a national average of 4.4 percent. As a result, Michigan ranked ninth among states in export growth in 2012.

The newest state export statistics reflect a mix of overall economic conditions in the countries of foreign buyers and also their preferences related to quality, design and price for various goods made in Michigan, ranging from business equipment and consumer goods to parts and raw materials.

State exports of manufactured goods — an important driver of jobs — accounted for 86 percent of all sales abroad in December. Foreign shipments from Michigan's factories decreased in December by 3.4 percent from the previous month to $4.26 billion, adjusted for seasonal variation.

Michigan exports of non-manufactured goods went down 2.9 percent in December to $692.6 million, also adjusted for seasonal variation. This group of shipments abroad 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 as when imported.

What are the worldwide economic prospects for 2013 that will shape the volume of global trade and eventually the foreign demand for goods made in Michigan? In its latest update of the World Economic Outlook, the International Monetary Fund indicated that“we may have avoided the cliffs, but we still face high mountains is one way of thinking about where the world is today.”

Presenting IMF’s World Economic Outlook on Jan. 23, Olivier Blanchard, IMF's director of research, added, “We should be under no illusions. There remain considerable challenges ahead.”

IMF projects global economic activity to expand by an annual growth rate of 3.5 percent in 2013 and 4.1 percent in 2014, following an estimated growth rate of 3.2 percent in 2012.

For the important export markets of the advanced economies, also called the industrial countries — the group includes Europe, North America and Japan — economic growth is forecast to remain substantially below potential levels in 2013 with overall economic activity increasing by only 1.4 percent. These economic growth numbers are not enough to make a dent in the unemployment rate in the advanced economies.

However, IMF is optimistic on economic growth for the emerging economies — like China and India — predicting the group to average an annual growth rate of 5.5 percent in 2013. Consequently, the non-industrial countries will be the major source of increase in global demand for goods made in Michigan this year.

IMF also predicts amodest growth pickupin international trade this year. The World Economic Outlook forecasts global trade to advance by an annual rate of 3.8 percent in 2013 — following increases of 2.8 percent in 2012 and 5.9 percent in 2011.

Evangelos Simos is chief economic adviser of the consulting and research firm e­ He may be reached at

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