The Editorial: Exports Will Help Drive Manufacturing Growth
NuStep Inc. is not a big company. Based in Ann Arbor, MI, the exercise equipment manufacturer employs 80 people and tallied $24 million in sales in 2010.
Nevertheless, NuStep was one of 41 U.S. companies to receive a Presidential “E” Award for Exports from the Commerce Department. The award is given annually to U.S. companies that make significant contributions to expanding U.S. exports. To be eligible for the award, a company must demonstrate four successive years of export growth.
While many Michigan companies saw their revenues plummet during the recent recession, NuStep’s revenues only fell from $20 million in 2007 to approximately $19 million in both 2008 and 2009, according to company president Dick Sarns. Clearly, exports helped the company ride out the storm.
NuStep’s success demonstrates the importance of exports to the continued growth of U.S. manufacturing. Manufacturing accounts for 60 percent of U.S. exports, and those export-related jobs pay even higher wages than non-export manufacturing jobs, according to the Manufacturing Institute.
In his 2010 State of the Union address, President Obama vowed to double U.S. exports by 2015. That’s a tall order, but progress is being made.
According to the U.S.-China Business Council, business is booming for American manufacturers who sell products in China. From 2000 to 2011, U.S. exports to China soared, growing from $16.2 billion to $103.9 billion—a 542 percent increase. That makes China the third-largest export market for U.S. companies, behind Canada and Mexico.
Of the top five U.S. exports to China in 2011, two are assembled products: computers and electronics ($13.7 billion) and transportation equipment ($13.2 billion). At $14.7 billion, agricultural goods are the No. 1 export—and that means more business for Deere, AGCO and other manufacturers of agricultural equipment.
Last October, President Obama signed free trade agreements (FTAs) with Colombia, South Korea and Panama. The FTA with Colombia has already paid dividends for one U.S. manufacturer, Harley-Davidson, which has begun shipping “Hogs” to Bogotá from its assembly plant in Kansas City, MO. Prior to the FTA, Colombia imposed a 15 percent tariff on the company’s motorcycles.
The United States exported $14 billion in goods to Colombia last year, including cars, consumer electronics and food, and exports are expected to rise by more than $1.1 billion as a direct result of the pact, according to the International Trade Commission.
More help for exporters came this spring. In March, the Obama administration opened two new national, multiagency centers to improve how the government administers its export control system. And in May, Congress reauthorized the Export-Import Bank, which helps American businesses sell their products around the world.
It truly is a global economy. Just last week, I interviewed an equipment supplier that had recently shipped an assembly system to Cameroon, of all places. Want to grow sales? Look beyond our borders.