State Exporters Report Record Sales

Connecticut exporters reported their best year ever in 2008 with sales of $15.3 billion.

While the state’s export industry experienced record sales last year, economists are tempering the good news with a warning that the deepening global recession will sharply reverse that upswing.

Despite record growth, the strengthening of the U.S. dollar and the recession’s global hit makes it virtually impossible for Connecticut to maintain its double-digit growth through 2009, said Pete Gioia, an economist with the Connecticut Business & Industry Association.

“We’ve got to expect this sector is not going to be stellar this year. It may still look pretty darned good compared to things like housing, domestic auto sales and some financial services, but 2009 is not going to be a record year,” Gioia said.

He estimates that exports will shrink by 10 percent this year, putting Connecticut closer to 2007 figures — also a stellar year — when the state’s exports increased by nearly 13 percent to $13.8 billion.

Jobs associated with exports have been particularly valuable to Connecticut. Nearly one in three manufacturing state workers depend on exports for their jobs, according to the U.S. Department of Commerce. Only Washington state depends more on exports for jobs than does Connecticut.

“Given the current economic climate, exports’ ability to positively impact job creation and the economy is significant,” said Costas Lake, Department of Economic and Community Development’s international division director.

Industrial machinery, including computers — typically the state’s largest export commodity — grew 7.9 percent to $6.2 billion. Aircraft and aerospace components, also usually a leading export item, grew 19.6 percent to $1.6 billion, despite a major hit the aerospace business took when oil prices climbed to more than $140 per barrel over the summer.

However, state aerospace manufacturers can expect the demand for their exports to fall, said state Rep. Demetrios Giannaros, D-Farmington. “Sales relating to helicopters and aircraft engines, which are some of the biggest export items, may suffer somewhat because of the recession,” said Giannaros, also a University of Hartford economics professor.

Unusual Growth

All but one of the state’s top 10 export sectors experienced growth last year, as did exports to four of the state’s top five trading partners.

Some exports experienced unusual growth, making it unlikely that their success stories will be duplicated in 2008. The cereals category, which includes corn and wheat, jumped 296 percent from $71 million in 2007 to $284 million last year. The explosive growth of the commodity, which only had $2.4 million in exports in 2006, puzzled the state’s Department of Agriculture, which said the items did not originate from Connecticut but likely were sold through an in-state broker.

Iron and steel exports, which grew 73 percent in 2007, experienced a 65 percent increase to $385 million in sales last year.

U.S. steel became more attractive abroad as the dollar weakened early last year. But with a stronger dollar now and a construction slowdown, Connecticut steel and iron could take a major hit in 2009.

Gioia said manufacturers have already noticed a slowdown over the past few months.

Anne Evans, district director of the U.S. Commercial Service, said companies can continue to export successfully despite a global downturn if they can reach a niche market.

“Any company that has something innovative or something that’s unique, there’s probably an export market for it” Evans said.