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September 23, 2019 Innovation & Technology: GLOBAL BUSINESS

Connecticut exports are booming

Photo | Contributed Aerospace products, such as Kaman Corp.’s K-MAX heavy-lift helicopters, have traditionally been among the state's top exports, but the COVID-19 pandemic greatly disrupted the sector.
Aerospace products make up the largest portion of Connecticut exports.
Anne Evans, the director of the U.S. Department of Commerce’s trade outpost in Middletown, hosts “Export Week” to encourage more small businesses to seek foreign customers.
This story was published in Hartford Business Journal's "Doing Business in Connecticut 2019" publication, which showcases the state's many economic development opportunities, and the attributes that make Connecticut a special place to work, live and play.
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While it may be one of the smallest states in the nation, Connecticut has a big global footprint, having become a supplier of everything from computers to chemicals for countries around the world.

And based on figures in the April 2019 edition of The Connecticut Economic Digest, published by the state departments of labor (DOL) and economic and community development (DECD), prospects are only growing brighter by the day. In 2018, the state’s commodity exports jumped 17.7% over the previous year, with Connecticut companies cumulatively posting a record $17.4 billion in goods – up from $14.78 billion in 2017.

The report notes that this “positive upswing” does not include the export of services, for which accurate data is not available at the state level: “This means that export figures for a state like Connecticut, with a large concentration of insurance, financial and other services, understate the true magnitude of its overall export value.”

Even so, statistics show Connecticut’s exports are on a bullish trend. From 1997 through 2005, the state’s commodities exports were consistently below the $10 billion mark annually but have stayed well above that level for the past 13 years. Commodity exports now represent about 6% of Connecticut’s $276 billion annual gross domestic product. And while the Nutmeg State consistently ranks about 27th nationally by dollar amount, it was responsible for 30% of New England’s exports last year – second only to Massachusetts.

Anne Evans, director of the U.S. Department of Commerce Export Assistance Center (USEAC) in Middletown, attributes a significant portion of the 2018 increase to advanced manufacturing and, in particular, to aerospace parts and components, which make up the largest portion of Connecticut’s exports. “This includes jet engines, but also components from hundreds of small companies in the state,” she said. “Advanced manufacturing companies are exporting all types of aerospace, medical devices, marine and space components.”

Exports of aerospace parts alone increased last year by 26.4% to almost $7.2 billion, and now represent 41% of all commodities. But there is good news in other product sectors as well. Exports of industrial machinery and computers rose by 16%, while optic, photo and medical instrument exports increased by nearly 15%. Chemical products and vehicle exports were each up more than 28%, while pharmaceuticals posted a gigantic gain of 664%, from $35.5 million in 2017 to $271.7 million last year.

The 2018 numbers also showed a huge increase in exports to Connecticut’s number one market. Exports to France, which is home to Airbus’ corporate headquarters, jumped by 50% last year, to nearly $3.2 billion.

“All of the new Airbus A321s – the largest selling planes out there – are built on Pratt & Whitney engines. That’s a big part of it,” says Evans. “Also, Airbus buys a lot of parts and different component parts from Kaman.”

In April 2018, Airbus named Bloomfield-based Kaman, which engineers and designs aerospace parts and makes composite structures, as a “strategic supplier,” the highest designation in terms of service, quality, technology, on-time delivery, and readiness to ramp up production when needed. Airbus has been a Kaman client for more than 30 years, describing Kaman’s products “a game changer” for its wide-body planes.

Connecticut’s other top 2018 markets were Germany ($2.33B), Canada ($1.95B), and the United Kingdom ($1.49B).

Of the state’s top 10 export markets, the largest percentage increases were to Singapore (up 56%), France (50.3%), Germany (27.8%), the Netherlands (24.5%), and China (18.7%).

A helping hand

When it comes to exports, both the state of Connecticut and federal agencies have a lot to do with the success of local companies on the world stage. For example, DECD administers a State Trade Expansion Promotion (STEP) grant award from the U.S. Small Business Administration (SBA) and works closely with organizations like the Connecticut Center for Advanced Technology (CCAT), Connecticut Economic Resource Center (CERC), and the Middletown Export Assistance Center to support small business exporters in a variety of ways, and help them increase their sales.

Evans said from a practical standpoint, and as part of a global network of trade professionals operating under the federal Department of Commerce banner, she and her team at the Export Assistance Center take the lead on most initiatives, connecting Connecticut companies with international buyers, and providing everything from market intelligence, trade counseling and business matchmaking to advocacy and commercial diplomacy support.

Evans likened the services provided to a “direct dial” to export and trade assistance. “We are the 211, 411, 511, 611 and 911 of exports and trade,” she said.

Among the services offered are links to business and community services that can help potential exporters with documentation paperwork, hiring of interns, and more. “We are the only agency in Connecticut that provides training services in export marketing promotion, help companies with their website digital presence, and dozens of other things. As well as working with school districts on global business training and student exchange, we organize Connecticut Export Week every spring. All of this is done out of our office.”

She said the center also provides website addresses and telephone numbers for all the other U.S. and foreign export and trade agencies as well as “foreign embassies to certify documentation, the Bureau of Industry and Security for licensing questions, and professional experts to help with vetting of overseas partners and customers.”

In addition, the team helps companies ship products from Connecticut to the rest of the world by providing logistics training, export documentation services, duty and tariff information, and duty drawback information. They’ll also assist when businesses are encountering trouble with things like non-tariff barriers, and standards and certifications in a particular market.

And the 911 aspect? “These are the calls that come on weekends and nights. Companies will call us and say, ‘Our products are stuck in customs overseas! We have a licensing problem! We filled out the wrong paperwork!’ We’re fixing problems 24/7.”

The Middletown Export Assistance Center is part of the U.S. Commercial Service – the trade promotion arm of the U.S. DOC’s International Trade Administration. With offices across the U.S. and in American embassies and consulates in approximately 80 countries, Evans said, “we can help Connecticut businesses that are bidding on foreign government contracts with advocacy services, where our embassy will meet with the foreign government and promote the Connecticut company.”

Overall, said Evans, the Middletown center supports roughly 2,000 Connecticut exporters.

She says among the center’s most successful collaborations were with ACMT, a Manchester aerospace components manufacturer whose exports and domestic portfolio have both been growing at a fast clip, and ID Mail Systems of Middletown, a provider of automated mail sorting systems. She even got a call one day from a pipe organ manufacturer who needed to ship an organ to a customer in Asia and wanted to find out how to obtain the licenses he needed to do so.

She’d like to see more Connecticut businesses get into the export game. That’s part of the reasoning behind Export Week, a series of webinars and live events designed to help existing exporters with any problems they may be having, and to bring new exporters into the fold.

“Export Week is really about training – how to do this and that,” said Evans. “Most of it is available at your desk, and it’s all free. If you’re an experienced exporter, you might be interested in learning more about compliance, but if you’re thinking about exporting, you might want to learn about finance, insurance, or translation services.”

The annual event – the only one of its kind in the country – was launched three years ago and has garnered great support from organizations that recognize its value. Beyond education, Evans said, “It’s really about also saying to Connecticut businesses, ‘We’re an exporting state. If you want to export, hop on a webinar.’ We’re trying to open up exporting to any company that wants to learn.”

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