Ohio’s merchandise exports reached record levels in the first half of 2012, propelled by a strong global demand for transportation equipment produced in the state, according to new data analyzed by the Dayton Daily News.
By the end of June, Ohio companies had already shipped $24.6 billion worth of goods and services overseas, up $2.4 billion from the first half of 2011, according to data from the International Trade Administration.
Almost half of the dollar growth in exports was linked to increasing international orders for transportation equipment, which rose $1.1 billion through June to $7.8 billion.
Commerce and trade officials said it is crucial for Ohio businesses to broaden their customer base to foreign markets to remain competitive in the increasingly interconnected business world and also to capitalize on the state’s production of goods and services that have international appeal.
Exports “are driving economic growth, and that is resulting in more and better jobs for Ohioans,” said Wesley Aubihl, assistant deputy chief of export assistance at the Ohio Department of Development.
Exports in Ohio in the first half of 2012 increased to a record $24.6 billion, up 11 percent from the same period in 2011 and up 21 percent from 2010, according to data released in August by the International Trade Administration, which is part of the U.S. Department of Commerce. More than 15,000 companies in Ohio export goods to foreign countries, and most are small- or medium-sized businesses with fewer than 500 employees.
At the current rate, Ohio’s export industry could exceed last year’s total of $46.4 billion. In 2010, Ohio had $41.5 billion in exports and $34.1 billion in 2009.
Merchandise exports reached record-high dollar values in 34 U.S. states in the first half of this year, and exports of transportation equipment saw the largest growth of any industry, the administration said. Ohio ranked fourth in the nation for the dollar growth of its transportation-equipment exports in the first half of the year, increasing to $7.8 billion from $6.7 billion during the same period in 2011. In the first half of 2010, these exports totalled $6.4 billion.
Transportation equipment includes automotive vehicles and parts, and products and parts related to aerospace, ships, boats, recreational vehicles and railroad rolling stock. Ohio has significantly increased exports of aerospace parts and industrial machinery, which shows that other parts of the world are making more capital investments, Aubihl said. Vehicles and vehicle parts are also some of the state’s fastest-growing export products.
Expanding markets
Exports are an important driver of economic growth in Ohio because 95 percent of the world’s population does not live in the United States, and the world’s middle-class population is rapidly expanding, providing local businesses with a great opportunity to attract new clients, trade officials said.
“Exports from Ohio are up, and selling internationally has become a much more viable option for small businesses and entrepreneurs,” said Debbie Dirr, international trade specialist with the International Trade Administration’s U.S. Commercial Service in Dayton. “In many cases, the Internet, ease of transportation, and array of available export services has reduced the distance between exporter and importer to a click on a desktop.”
Production Control Units Inc., a Moraine company that specializes in the production process, automated assembly and product-testing solutions, is currently working on projects for customers in Mexico, Venezuela and Brazil, and it is in discussions with a customer in Russia, said Tom Hoge, the company’s president and a trustee on the board at the Dayton Region Manufacturers Association. About half of the company’s new projects are in the transportation field, and about half are for international customers, Hoge said.
Hoge said his company initially attracted interest from international customers through their contacts in North America, but over time, his company’s brand has become recognized across the globe. He said his company performed work for Whirlpool of India through the U.S. arm of the company, but it now deals directly with Whirlpool of India, because they have an established business relationship. Hoge said the global demand for goods and services from Ohio and the United States will continue to grow because domestic manufacturers provide skilled workers, complex technologies and precision assembly and production.
“There is no other country that is as productive and as innovative as America, and when it comes to manufacturing, we will remain the leader of innovation,” he said.
Ohio businesses need to look outside of U.S. borders for new customers, and the International Trade Administration can help by leveraging financing and providing access to other resources, the administration said.
Creating global ties
The U.S. Commercial Service, which has an office at the Raj Soin College of Business through a strategic partnership with Wright State University, coordinated with colleagues at the U.S. Embassy and Consulates in China to help SAS Automation of Xenia expand its sales of end-of-arm tooling used in robotics for the automotive, plastics and palletizing industries. The local office helped SAS Automation through prearranged overseas business appointments in conjunction with the ChinaPlas plastics trade show. As a result, a Chinese distributor signed on with the company and SAS Automation now has significant sales in the world’s most populous country.
The Ohio Department of Development also works with businesses in the state to develop international marketing plans, and it also offers the International Market Access Grant for Exporter, which reimburses companies for money they spend on activities related to international marketing initiatives.
Acting U.S. Commerce Secretary Rebecca Blank said U.S. exports are a bright spot for the nation’s economy, and the country is making progress in achieving President Barack Obama’s National Export Initiative goal of doubling U.S. exports by the end of 2014. She said exports support millions of American jobs, and growing the number of exports leads to more jobs.
“We are working hard to connect American businesses with opportunities in fast-growing markets, and prioritizing markets and sectors where U.S. businesses can successfully meet the demand for high-quality American goods and services,” Blank said.