Struggling economies in Europe and Asia held growth back, but Minnesota still sent $20.6 billion of goods to other countries in 2012.
Minnesota exports grew 1.2 percent in 2012, as steady growth in Canada, China and a surging Mexico helped offset broader global economic weakness.
The figures, released Wednesday by the Department of Employment and Economic Development, were good enough to set another record for the state, even though exports were barely better than flat in Europe and fell by 3.3 percent in Asia.
“Growth was a little bit slow,” said Katie Clark Sieben, commissioner of the department. “Good to see that we have growth … but we need to make sure that we’re continuing to increase the pace of growth, and focusing on that.”
Considering the state of the world economy, any export gains are hard won. China’s growth slowed in 2012, and with it the rest of Asia. Europe remains stagnant, with unemployment over 25 percent in Spain and Greece.
Exports to Asia fell because of negative years in Japan, Malaysia and Singapore. And exports to Europe were up less than 1 percent, as sales in Germany, Italy and the United Kingdom fell.
“The recession has deepened in the first part of this year in Europe, and emerging markets are having some trouble reigniting economic activity,” said Scott Anderson, chief economist at Bank of the West. “You’re seeing weaker growth in Asia, as well as Latin America.”
U.S. exports rose 4.4 percent in 2012 to $2.2 trillion.
Canada remains by far Minnesota’s biggest export market, with companies and supply chains straddling the border. Exports to the north made up just over $6 billion of the state’s $20.6 billion in exports last year.
Despite the slowdown in China, Minnesota companies are still finding customers there, with exports up 7.1 percent. And Mexico is another fast-growing market, up 6.7 percent. Those three countries accounted for 47 percent of all Minnesota exports in 2012.
Exports of goods account for a little less than a tenth of Minnesota’s economic output, and Gov. Mark Dayton has identified exporting as a key economic development goal. Last year, he announced the MSP Export Initiative, aimed at doubling Twin Cities exports by 2017.
To reach that goal, businesses in the metro area would have to increase exports at the brisk pace of nearly 15 percent per year, and so far they have not achieved that.
The state’s top export product was machinery, a broad category that includes outboard motors, jet engines, air conditioners and nuclear reactors. The state’s report, which does not include company-specific data, said machinery accounted for $4 billion in exports in 2012.
Medical devices, electrical machinery and electronics, various types of vehicles and plain-old plastic round out the top five categories.
More than 8,500 businesses in Minnesota exported goods and services in 2011, and almost 200 new businesses started exporting, according to the U.S. Department of Commerce.
“Seventy-five percent of the world’s buying power is outside the United States’ borders,” Sieben said. “We need companies to be thinking globally and be comfortable doing business in international markets.”
Dayton’s budget includes $1.5 million in funding for the Minnesota Trade Office to establish three new trade offices in foreign markets. There’s already one in Shanghai, China.
The money would also help fund a grant program that helps small businesses start exporting, and pay for more Minnesota marketing overseas.
The governor plans a trade mission to Germany, Sweden and Norway in June. The goal is to promote exports and connect with potential customers and long-standing partners in Europe and Scandinavia, his office said. He also wants to help attract more foreign direct investment, that is, foreign companies opening factories or offices in Minnesota.