U.S. Exports Hit New Records: Strategies that Work

Combined, American exports of goods ($1.56 trillion) and services ($630 billion) reached nearly $2.2 trillion in 2012. This represents an increase of almost $93 billion or 4.4 percent over 2011. From 2011 through 2012, 35 states achieved merchandise export growth, 29 hit new records, and 20 of those states experienced growth of at least 5 percent or more, according to the U.S. Department of Commerce.

Jobs supported by exports reached 9.8 million in 2012. This reflected an increase of 1.3 million since 2009, the Department of Commerce also reports. This is good news since the overall U.S. unemployment rate, which registered 7.7 percent in February, continues to remain elevated.

America’s Biggest Export Partners

Last year, U.S. exports to Canada ($292.4 billion) and Mexico ($216.3 billion) represented one-third of all products sold abroad. The next largest destinations included China, at $110.6 billion; Japan, $70 billion; and the United Kingdom, $54.8 billion. Combined, these destinations represented nearly 50 percent of all U.S. merchandise exports.

U.S. exports to Europe, at $328.9 in 2012, barely surpassed those in 2011. But sales to the Pacific Rim, at $379.6 billion, and Central and South America, at $183.9 billion, were up 3 Percent and 9 percent, respectively.

For an increasing number of companies, exporting is essential to achieve success in the 21st century. But selecting the right markets to pursue can be difficult.

The top ten export product categories included transportation equipment; computer and electrical products; chemicals; machinery except electrical; petroleum and coal products; primary metal manufactures; miscellaneous manufactured commodities; agricultural products; food manufactures; and electrical equipment, appliances and components.

Top Ten Performing States

As is typical, last year Texas and California outperformed all the other states by a wide margin. In 2012, Texas and California merchandise exports reached $265 billion and $162 billion, respectively. Following were New York, at $79 billion; Washington, $76 billion; Illinois, $68 billion; Florida, $66 billion; Louisiana, $63 billion; Michigan, $57 billion; Ohio, $49 billion; and Pennsylvania, $39 billion.

In terms of growth, from 2011 to 2012, New Mexico incurred the greatest jump, at 42 percent. This was followed by Arkansas, at 36 percent; Nevada, 28 percent; North Dakota, 26 percent; West Virginia, 26 percent; Washington 17 percent; Wyoming, 17 percent, Louisiana, 15 percent; Michigan, 12 percent; and Colorado, 11 percent.

For an increasing number of companies, exporting is essential to achieve success in the 21st century. But selecting the right markets to pursue can be difficult. By establishing a set of guidelines, the task can be made easier. To help, consider the following factors.

1. Study Economic Indicators

Rank your potential country markets by how much of your product they import from the U.S. Then rank each by their total demand (domestic production plus world imports) for the previous three years. From this you can determine market size, its rate of growth, and U.S. market share.

If total demand for your product is increasing, review the country’s growth rate and per capita income. If indicators are positive, it’s likely that demand will continue to rise.

2. Research Barriers & Competition

Identify each selected market’s trade barriers. If excessive, they may push your prices too high. Know your competitors, their products, prices, distribution methods, and consumer base. If intense competition exists, consider smaller markets that may be unattractive for multinationals, but big enough for you.

3. Assess Risks

Importers with soft currencies or insufficient reserves may find it difficult to pay you. Understand the risks, buy insurance or choose other markets. If you accept foreign currencies, guard against fluctuations. Keep abreast of political risk. Civil unrest or policy changes may harm your interests.

4. Investigate Infrastructure

If your product requires a skilled support staff, make sure it’s available. If not, you may be forced to provide costly support from home. The lack of physical infrastructure also may curtail sales. The inability to quickly deliver products due to inoperable roads can be a deterrent.

5. Research Legal Issues

Many countries claim to enforce intellectual property laws—but don’t. Investigate how piracy is handled. If protection isn’t a priority, you may want to avoid this market. In some countries judges may unfairly favor domestic sales agents or consumers. Assess each country’s legal practices and investigate safety and environmental regulations.

The bottom line: establish the factors you feel will best help you determine the markets to pursue—and accurately weigh them.

About The Author John Manzella [Full Bio]

John Manzella, founder of the Manzella Report, is a world-recognized speaker, author of several books, and an international columnist on global business, trade policy, labor, and the latest economic trends. His valuable insight, analysis and strategic direction have been vital to many of the world's largest corporations, associations and universities preparing for the business, economic and political challenges ahead.




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