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America: Export Nation?

There’s some interesting data emerging on the world trade situation.

One of the surprising things is the U.S. export market is actually fairing reasonably well.

People often pan America for having no exports. It's a common complaint the U.S. doesn't produce anything the rest of the world wants.

This is untrue. These critics latch onto the fact the U.S. produces almost no consumer goods. America doesn't make t-shirts and CD players. It's just not cost effective for these low-end products.

American export value peaked in early 2007 at just under $340 billion quarterly. Of that, only $40 billion came from consumer products.

What America does produce is capital goods. Engines, boilers and factory components. High-value products that are used by developing countries to make lower-value things. America gets 40% of its export revenue here.

And even with the global crisis, the capital goods market has remained relatively firm. Exports peaked in Q2 2008 at $118 billion for the quarter. In the first quarter of 2009, as the crisis broke, they fell to $95 billion. But capital exports held fast at these levels through the second and third quarters of 2009. We'll get the fourth quarter numbers soon, and see if the trend keeps up.

Although this is a 20% decline, it's quite shallow in the big scheme of things. Exports today are at the same level as in 2006. Still 35% above 2003 levels.

Signaling that high-value products might be a good place to be. There are still factories being built globally. And there aren't many places builders can get the components. America may hold a strong niche.

One reason not to write the U.S. off in the economic order.

Here's to doing your thing,

By. Dave Forest of Notela Resources




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Leave a comment
  • Anonymous on January 21 2010 said:
    let's not forget how the export numbers are aided by being the leading exporter of death, that being the number one arms exporter in the world.
  • Anonymous on January 22 2010 said:
    I studied engineering in Chicago and L.A., and worked as an engineer successfully for the U.S. Navy, and unsuccessfully in L.A. I have taught (economics) at engineering schools in Singapore, Bangkok, Lisbon and Sydney (Australia). If the U.S. got down to business, as they did during WW2, they might be unbeatable again. What's the problem I ask - although I know the answer.

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