State's exports surge again

Article by: DEE DEPASS , Star Tribune
Updated: May 10, 2012 - 10:42 PM

Shipments abroad of Minnesota agricultural, mining and manufactured goods in 2011 rose 7.3 percent to $20.3 billion.

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Dan Schroeder, left, and Dustin Rollins tested a packing machine at Delkor Systems.

Photo: Elizabeth Flores, Star Tribune

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Minnesota exports of agricultural, mining and manufactured goods topped $20 billion for the first time last year, beating the 2008 record and furthering the state's mission to grow exports and related jobs.

Exports in 2011 jumped by $1.4 billion mostly because of increased demand from Minnesota's top trading partners, including China, Japan, Canada, Mexico, South Korea, Belgium, Singapore and the Philippines. Sales of machinery, medical and optics instruments, plastic, animal feed, cereal, and parts for vehicles, planes and spacecraft drove most results.

Katie Clark, executive director of the Minnesota Trade Office, said Thursday that exports contribute 115,000 jobs to the state's economy.

"I am not surprised,'' said Bob Kill, CEO of the manufacturers assistance firm Enterprise Minnesota. He said several packaging-machine makers are growing rapidly thanks to recent efforts to boost their exports. Combined, Delkor Systems in Minneapolis; Aagard and Douglas Machine, both in Alexandria, and Massman Automation in Villard, Minn., are "the Silicon Valley of this type of robust packaging machinery. They are all growing absolutely and are adding people," Kill said.

In a recent Enterprise survey, the companies said "they are more diligent about trying to export," Kill said.

But economists found that much of Minnesota's export growth occurred earlier in the year. Fourth-quarter exports grew just 1.4 percent to $5.09 billion from the same period in 2010. Much of that growth was due to an uptick in orders from China and South Korea.

According to data released Thursday by the Minnesota Department of Employment and Economic Development, Canada remained Minnesota's top trading partner with $5.8 billion in sales for all of 2011, up 7 percent. China placed second with $2.3 billion, up 18 percent, while Japan placed third with $1.3 billion, up 15 percent. Mexico placed fourth with $1.2 billion, up a brisk 24 percent.

Minnesota exports to Germany and the United Kingdom fell 6 percent and 5 percent respectively, although both countries remained among Minnesota's top 10 exports customers.

Minnesota exports to the troubled eurozone fell 2 percent, to $4 billion last year. Europe has been plagued by recession and debt crises. In contrast, North America (Canada and Mexico) bought $7 billion worth of goods from Minnesota-based factories and farms, up 10 percent. Asia bought $6.9 billion, up 11 percent.

Minnesota's largest export category was machinery. Other nations scooped up $4 billion worth of general machinery. That was followed by orders for optics-and-medical instruments; electrical machinery; plastics, parts for vehicles, planes, and spacecraft; food waste and animal feed; cereals; mineral fuel and oil; and ore, slag and ash, according to the economic development department.

"Exports have a significant impact on the state economy and are an important driver of job growth," said Clark from the Minnesota Trade Office.

Her office has linked forces with the mayors of Minneapolis and St. Paul, the Brookings Institution in Washington, and with the local office of the U.S. Commerce Department to try to push exports as an economic development tool, she said. The goal, launched earlier this year, is to get more small and midsized manufacturers to sell goods abroad.

Ongoing demand for Minnesota exports helped the state survive the recession. Now the goal is to double exports and significantly increase related jobs over the next five years, Clark said.

Cliff Waldman, an economist for the Manufacturers Alliance/MAPI, said that Minnesota and the nation could see an exports slowdown over the next few years because of the economic crisis in Europe and moderating growth rates in China, India and Brazil.

"You'll have a bit of a murky outlook for U.S. exports over the next few years," Waldman said, adding that strong competitive states such as Minnesota will survive better than other states.

"Minnesota will still get its cut. But it will be a cut of a more difficult situation," he said.

Dee DePass • 612-673-7725

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