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Study Urges Exporting States to Shun Woodworking

By Mike Botta

A new study suggests that exporting states need to become more flexible in dealing with their international trading partners because products sought 10 years ago may not be the same products they want now.

And, wood products are lumped in with the items considered less desirable for export, according to the report.

The study, "U.S. Export Adaptability at the State Level" by Ball State's Center for Business and Economic Research, found that goods and materials produced by companies in “adaptable” states are in high demand as world trade markets continually evolve.

Exports to Accelerate U.S. Recovery

"It is in each state's best interest to shift its production and exports away from the declining markets, including wood, paper, textiles, and footwear/headgear, and into the growing ones – chemical, machinery and electrical products – for the long-term welfare gain from international specialization," Nalitra Thaiprasert, research economist at Ball State, who headed the project, said. "As the domestic economy emerges slowly from a recession, U.S. companies are recognizing that expansion lies in selling to foreign markets, and U.S. officials are counting on exports to accelerate the recovery."

(To access the report, click here…)

The study examined the adaptability of individual state exports to the changing demand of Organisation for Economic Co-operation and Development (OECD) countries during 1999-2009. Total OECD import peaked in 2008 at $10.4 trillion and dropped to $7.8 trillion in 2009 because of the world economic recession.

Most Adaptable States

The study found that the 10 most adaptable states during the period 1999-2009, ranked in order, were:

·       Nevada

·       West Virginia

·       Delaware

·       Utah

·       Indiana

·       Connecticut

·       Massachusetts

·       South Carolina

·       Texas

·       Kentucky

Of those, the top five states, according to the study, produce large amounts of machinery, pharmaceutical, chemical, electrical and medical items, goods sought by members of the OECD, a 34-member international group founded in 1961 to stimulate economic progress and world trade. Most member countries are in Europe but Mexico, Japan and Australia also are represented.

"Like the other states in the top five, Indiana has invested in these key industries over the past few decades," Thaiprasert, said. "Hoosiers are currently producing what the world is demanding, which bodes well for our economy in the coming years." Ball State is located in Muncie, IN.

Least Adaptable States

On the lower end of the scale, the 10 least adaptable states when it comes to exports were:

·       New York

·       Florida

·       Iowa

·       Rhode Island

·       Louisiana

·       North Dakota

·       South Dakota

·       Alaska

·       Nebraska

·       Maine

A press release announcing the Ball State study pointed out that the Obama administration has a goal of doubling U.S. exports by 2014 in order to generate stronger economic growth at home.

Of course, with today’s weak U.S. dollar and little evidence that it will bump up in value anytime soon, that goal may be reached before the next election.

Hmmm.

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