Magazine article Economic Trends

Exports from the Fourth District States

Magazine article Economic Trends

Exports from the Fourth District States

Article excerpt

1.31.13

In the Fourth District states of Kentucky, Ohio, Pennsylvania, and West Virginia, exports make a significant contribution to the economy. The total value of goods exported by these states is approximately $122 billion per year, which equals just under ten percent of their combined Gross State Products. In the recent recession, their exports took a hit but have since rebounded. Despite a moderate slowdown in the third quarter of 2012, long-term trends in the Fourth District's exports look promising. Foreign sales of chemicals are increasing, and markets in China and Mexico are growing.

During the recession, total exports from the Fourth District declined by over 18 percent. Since then, exports from Kentucky, Ohio, and Pennsylvania have slowly returned to pre-recession peaks. Meanwhile, West Virginia's exports have soared, as markets abroad have demanded the state's mineral products.

Among the Fourth District states, West Virginia's total exports have shown the most impressive trend. Before the recession, the value of West Virginia's exports was approximately $1 billion per quarter. Since the recession, that value has climbed above $2.5 billion, driven by mining products including coal. (These figures are adjusted for inflation to represent 2012 dollars.) Kentucky's total exports have slowly returned to their pre-recession peak near $5.8 billion per quarter. Ohio and Pennsylvania have also recovered from precipitous drops in exports during the recession. For Ohio, exports averaged a near-peak $12.2 billion per quarter in the first three quarters of 2012. Pennsylvania's exports grew to a new high of $10.9 billion in the second quarter of 2010 before sliding back to $9.1 billion in the third quarter of last year.

Slowdowns in exports to China and the euro zone received much attention last year, but the greatest concern for Fourth District exporters is still North America. Canada is by far the largest purchaser of Fourth District exports, followed by Mexico. Despite a relatively mild recession in Canada, exports heading there dropped from a peak of $10.4 billion per quarter in 2008 to $7.8 billion per quarter in 2009. Fourth District exports to Mexico have grown 22 percent above their pre-recession peak.

As of third quarter 2012, exports to Canada and Germany were down 6 to 7 percent from the previous quarter. While sales to China fell from $2.2 billion to $1.7 billion, total exports in those quarters and the two before were nearly double the total value of exports in 2007. …

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