Strong foreign demand for goods made in Nevada improved the state's international trade picture, perking up sales of exporting companies, mending local jobs tied to exports and advancing overall economic development.
Following two consecutive monthly declines of 4.2 percent and 7.6 percent, exports from Nevada bounced back by 8.3 percent in July. Foreign buyers spent $317.6 million to buy goods made in the Silver State.
International trade numbers for Nevada are adjusted for seasonal variation to better gauge the state's performance from month to month and make them comparable to national exports which are reported on a seasonally adjusted basis. The adjustment smoothens out the original data for the influences of weather, the number of days in a month and holidays like Independence Day in July.
On an annual basis, Nevada's exporting companies surpassed their performance in comparison with a year ago. In July of this year, state exporters sold overseas $90.2 million, or 39.6 percent, more goods than in July of last year.
At the national level, U.S. exports of goods, seasonally adjusted, increased by 0.5 percent to a record $74.9 billion in July. The latest rise in national exports to their highest level in history reflected increases in foreign sales of major groups of manufactured goods like consumer goods, capital goods and auto vehicles, parts and engines.
Nevada's manufacturing companies again played an important part in the state's export performance as their sales abroad accounted for 78 percent of all state exports in July. Foreign consumers and producers bought $249.1 million worth of manufactured goods made in Nevada in July, adjusted for seasonal variation, 13.9 percent more than in the previous month.
Exports of gold led July's surge, registering $169 million, up 98.6 percent from last year. The destination of gold exports was Switzerland. Nevada's major companies in gold mining and production are Kinross Gold, Meridian Gold and Barrick Goldstrike.
Exports of non-manufactured goods went down 8.1 percent in July to $68.5 million, adjusted for seasonal variation. This group of Nevada's foreign sales consists of agricultural goods, mining products, and re-exports which are foreign goods that entered the state as imports and are exported in substantially the same condition as when imported.
The expansion of state manufacturers to overseas markets has beneficial effects to overall economic development in general and the labor markets in particular. Increased globalization of Nevada's manufacturing companies generates not only jobs in the exporting plants but also results in spillover job creation in other manufacturing industries as well as non-manufacturing industries which all contribute to the final preparation of the goods shipped abroad.
July's exports of manufactured goods supported 18.4 thousand manufacturing jobs in Nevada. More important, exporting activity in manufacturing companies has triggered significant ripple effects in other industries.
A total of 22.2 thousand additional state jobs in wholesale and retail trade, transportation, business services and to a lesser degree utilities, mining and agriculture were linked to exports of manufactured goods in July.
So far this year, U.S. exporting companies have flourished in doing business abroad. National exports of goods have soared by 11 percent, compared with a jump of 13.2 percent in 2004 and a moderate rise of 4.5 percent in 2003. It is also important to note that U.S. exports have hit an all-time high in five out of the first seven months in 2005.
How did Nevada exporters fare in terms of growth so far this year from the same period in 2004? Nevada ranked second among the fifty states in the first seven months of 2005. In comparison with the same period of 2004, overseas sales from Nevada's companies -- seasonally adjusted -- increased by an annual rate of 48.6 percent compared with an 11 percent average growth for the nation as a whole. Nevada's exporters have fared four times better than the national average so far this year.
The international economic outlook -- vital to export-related jobs in Nevada -- is expected to improve at the end of this year and in the beginning of 2006 according to the findings of the World Economic Survey conducted by the German Ifo Institute and the Paris-based International Chamber of Commerce.
About 1,100 executives from 95 countries have indicated that although the world economic climate did not improve for a fifth consecutive quarter, it has still remained at a high level. The recent findings are consistent with a growing global economy which slows down to its long-term growth performance following a strong upswing after the 2001 recession.
Regarding the future, the international executives polled expect economic conditions in their countries during the next two quarters to be better than current conditions prevailing in the third quarter of 2005.
With respect to international trade, the experts expect both exports from and imports to their countries to increase in the next two quarters, compared with the current trends during the third quarter of 2005. The global economic outlook is favorable and will result in a continuous increase in Nevada's exports in the rest of this year and in the first half of 2006.