Massachusetts Export Center

 

Boston Business Journal

 

Bay State export poised to expand after an off year

 

 

Boston Business Journal - by Jackie Noblett Journal staff

 

 

 

Massachusetts' standing as a top exporter of goods slipped last year, although experts are optimistic that the weak U.S. dollar and recent trade missions abroad will spur stronger growth in the months ahead.

 

Local companies shipped more than $25.2 billion in goods in 2007, up 5.1 percent from 2006, according to U.S. Census Bureau foreign-trade statistics. But the pace of growth was off a bit year over year, as the state's exports saw a 9 percent uptick in 2006. Nationally, exports were up 12.1 percent last year.

The state's status as a top U.S. exporter slipped as well; in 2004 the commonwealth was the 7th largest exporter in the U.S. Last year it was 13th.

 

Trade experts caution that the slip was likely random.

 

"It's difficult to point to one thing (that caused the slower growth)," said Paula Murphy, director of the Massachusetts Export Center. "But I think it's more of a blip. Looking ahead (to this year) we're busier than ever helping companies do business abroad."

 

Murphy blamed the slowdown to a downturn in several key sectors. For example, sales of medical instruments, the state's largest export sector, dropped 9.7 percent to about $1.8 billion.

 

"I don't know precisely what's causing this; frankly, it surprises me," said Tom Sommer, president of the Massachusetts Medical Device Industry Council. "In Europe they have shown a growing demand for U.S.-manufactured medical devices."

 

Also, the export drop may be linked to Europe and Asia's burgeoning technology industries, Murphy said. Exports to Germany, a growing force in the biotech industry, fell 5 percent, or some $143 million. Sales to Japan also fell about 5 percent.

 

Adding to the troubles was erosion within the state's manufacturing industry. Massachusetts lost about 3,600 manufacturing jobs last year, according to the U.S. Department of Labor's Bureau of Labor Statistics.

 

"I don't really see footwear, textiles, consumer goods coming back," said Joan Padduck, chairwoman of the Coalition of New England Companies for Trade, a consortium of import-export companies.

"But a lot of the exporters have a ton of imports (of component parts). Every time there is a restriction put on imports, it affects the export market. It's a vicious cycle."

 

Data suggest exports are the linchpin to the state's remaining manufacturing industry.

 

A total of 8,173 companies exported goods from Massachusetts in 2005, and 89 percent of those companies employed fewer than 500 people, according to a February 2008 report by the International Trade Association.

 

More than 26 percent of Massachusetts' manufacturing jobs rely on exports, the third highest share in the nation.

 

But examining the export of tangible goods does not give a clear picture of the state's trade activity.

The state also exports financial and technical services, items not tracked by census data.

Murphy said recent trade missions by state officials and the weak U.S. dollar to boost exports this year, and her prediction is already proving accurate. As of Mar. 17, exports were up about 16 percent year over year.


Jackie Noblett can be reached at jnoblett@bizjournals.com.


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