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March 20, 2008

With Many Troubles at Home, U.S. Exports Carry the Economy

In addition to Georgia, the rest of the country needs to be rooting for growth in global markets; PPI explains why:

In total, exports accounted for a third of last year's 2.2 percent GDP growth. As waves of bad news began to wash in last winter -- foreclosures, tumbling dollar, falling retail sales, more recently investment bank rescues -- exporters were the only thing keeping the national nose and lips above the recessionary waters. (The domestic economy shrank by -0.3 percent between October and December; export growth accounted for 0.9 growth; ergo, barely positive national 0.6 percent growth.)

Those searching for scarce good news can find some in January's trade report. This suggested another export-boom year ahead, with sales to China, Russia, Europe, and the Middle East all continuing to soar, while exports to Mexico, Canada, and Japan began to perk up. Interesting note as well: Last year's U.S.-Peru Free Trade Agreement entered into force in January, and exports to Peru hit $420 million, nearly double the $240 million for January 2007. Worsening news from the real estate, financial-market, and consumer sectors mean exporters may not be able to fend off a national recession this year. But their likely trio of round-number records -- $1 trillion in manufacturing exports, $500 billion in services exports, $100 billion in farm exports -- will ease its ferocity.

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