According to recent reports from the U.S. Department of Commerce, our country’s trade deficit is improving. Overall, the deficit in December was down more than $10 billion from the previous month and down from over $13 billion from the same month the previous year.
These figures have implications for both the economy as a whole and the manufacturing field. For the nation’s economic outlook, these statistics suggest that the “U.S. economy actually grew in the fourth quarter of 2012, not shrank as the government’s preliminary GDP figures indicated.” For the manufacturing industry, these figures indicate an improvement in the sector. Other statistics also support this notion. Michael Dolega, an economist with TD Economics, noted, “This morning's December actuals of 2.1% export growth and 2.7% retreat in imports paint a much improved net-export picture.”
Simply put, more manufacturers are embracing exporting, which is important to our country’s economic growth. In fact, out of America’s top 15 trading partners, the U.S. only has a trade surplus with two of those countries (Brazil and the Netherlands). Increasing exporting initiatives will help our country improve the trade deficit and should be made a higher priority.
Equally as important, exporting will help manufacturers increase sales. California manufacturers should focus more on exporting initiatives this year. Exporting allows companies to emerge into new markets and significantly increase sales. A recent survey conducted by McGladrey Manufacturing and Distribution Monitor found that 60 percent of companies that reported increased export activity stated that their company was “thriving and growing”. In addition to increasing sales, exporting can help businesses in other ways. Working with customers from international markets can provide new insight for American manufacturers. This could inspire new processes and innovations and enable manufacturers to test new products or methods.
While exporting helps promote growth, many manufacturers are overlooking the advantages. According to a fact sheet from the International Trade Administration, of America’s 30 million companies, less than 1 percent export, and of those that do, 58% only export to one market. If you are a California manufacturer who is considering exporting, the ExporTech Corporate Management Program can help. Click here to visit our exporting page and learn more about how you can increase sales.