10.3.2013 | Strong US exports are a major driver of the economic recovery, but there is still plenty of room for improvement, according to a new report from the Brookings Institution.
Per Brookings’ Export Nation 2013 page, which includes a handy map allowing you to track each metro’s progress (or potential):
“The top 100 metro areas alone account for 64 percent of the nation’s total exports and all but one of the top 100 metros saw an increase in exports from 2003 to 2012. While growth has been strong, the United States is more than $200 billion below the administration’s goal to double exports in five years. Only 12 of the top 100 metro areas have maintained the 15 percent annual growth rate required to double exports, suggesting that there is significant potential for the expansion of exports at the metro level.”
Signs of that potential are evident in some regional players who have brought production back home, like in this New York Times story of a revived textile mill in Gaffney, South Carolina. Situated between two thriving metros, Greenville and Charlotte, the region is beginning once again to produce textiles to export to neighboring states and other countries, like Brazil. In 2012, textile and apparel exports were $22.7 billion, up 37 percent from just three years earlier, the Times reports.
“Mr. Winthrop says American manufacturing has several advantages over outsourcing. Transportation costs are a fraction of what they are overseas. Turnaround time is quicker. Most striking, labor costs—the reason all these companies fled in the first place—aren’t that much higher than overseas because the factories that survived the outsourcing wave have largely turned to automation and are employing far fewer workers.”
According to Brookings’ data, in Greenville, fabric exports were up 1.7 percent in three years (2009-12) and accounted for nearly 3 percent of exports for the Greenville-Maudlin-Easley metro area. The trend is going in the right direction, even if the comeback is still small. Other textiles showed stronger growth. Fiber/yarn/thread production was up 9.6 percent, but accounted for only 0.3 percent of all exports. Likewise, “textile, fabrics, and finishing grew 12.4 percent but accounted for 0.2 percent of exports.”
In the Charlotte-Gastonia-Rock Hill metro area, fabric exports were up 8.9 percent and accounted for 1.7 percent of all exports while fiber/yarn/thread products were up 11.3 percent and accounted for 1 percent. Textile fabric and finishing was up 11.3 percent and accounted for 0.2 percent.
The Times article notes these points, declaring, “While the size of operations remain behind those of overseas powers like China, the fact that these industries are thriving again after almost being left for dead is indicative of a broader reassessment by American companies about manufacturing in the United States.”
More evidence of this resurgence is in another story in the Times, this one set in Minneapolis. There, the orders are so brisk that the Airtex Design Group, an apparel shop, can’t find enough workers to sew the garments it wants to sell. (Interestingly, after working with a local college to design training, they concluded that their best option is to institute on-the-job training—hopefully the beginning of a return to what was once a common.)
In addition to the obviously good news locally, this is all good news nationally because bringing manufacturing home sparks innovation and has a multiplier effect when it comes to jobs, as BRR’s Howard Wial (with Elizabeth Scott) noted here.
We conclude today back at Brookings, where Mark Muro and Jessica Lee listed myriad suggestions back in January as to how the nation might sustain economic (and export) growth by reenergizing the manufacturing sector. Among their ideas are creating national networks of “advanced industries (AI) innovation hubs;” developing the labor force, like the “Race to the Top” challenge for schools; and designating 20 “US Manufacturing Universities” that would include greater joint ventures with industry and training for both undergraduate and graduate students (Minneapolis could have used the latter).
Photo / AirDye