Study says '96 exports fell 7%, but Md. figures still incomplete Service sales made to foreigners weren't part of analysis

April 05, 1997|By Jay Hancock | Jay Hancock,SUN STAFF

Exports of Maryland goods fell by 7 percent last year, according to a new analysis, but by leaving out service sales to foreigners, the figures yield an incomplete picture of Maryland's trade performance.

Maryland exported $5.78 billion worth of merchandise last year, down from $6.22 billion in 1995, according to the Massachusetts Institute for Social and Economic Research. Nationally, goods exports expanded by 8 percent last year, to $609 billion, according to the Commerce Department.

The new figures include items made in Maryland that were shipped across international borders through other states. The institute based its report on government statistics.

But the new results don't include what are probably billions of dollars' worth of Maryland service exports. Services make up the bulk of Maryland's $125 billion economy and are its only growing part. The Commerce Department has a difficult time tracking service exports on a nationwide basis; it doesn't even try state-by-state.

Maryland business development officials nevertheless said they were disappointed with the report. Gov. Parris N. Glendening has emphasized exports as a way for Maryland to boost its

economy.

The dip in merchandise exports last year "does mean that full implementation of our strategic plan is vital," said James Hughes, director of international trade for Maryland's economic development department. The state is trying to tutor small firms in export skills, to attract branches of foreign companies here and to boost international traffic at Baltimore-Washington International Airport.

Exporters face a difficult 1997 because a stronger dollar is making U.S. products more expensive offshore.

Maryland's goods exports are dominated by a few big producers. Baltimore's General Motors plant, for example, has accounted for about $1 billion in annual exports in years past.

But such concentration can produce wide swings in results. Maryland's transportation exports, which also include shipments from aviation concerns Northrop Grumman and Lockheed Martin, fell by $490 million last year, or 18 percent, to $2.28 billion.

Maryland's industrial machinery and computer-related exports grew by 12 percent last year to $855 million. Noncomputer electronics fell 7 percent to $627 million; chemical exports dropped 4 percent to $430 million.

"The numbers bounce around a lot," Hughes said. "It's really tough to point out some trends. We are seeing some solid growth in some of our target markets: South America, Japan, Mexico."

Manufacturing businesses, the main goods-producing sector, make up only 8 percent of Maryland's economy, compared with about 15 percent of the country's. By contrast, nongovernment service producers from phone companies to law firms account for more than half of Maryland's economy, and, by many anecdotal accounts, are trying harder to sell overseas.

Maryland's service exports include foreign tourists at Oriole Park at Camden Yards, foreign patients at Johns Hopkins Hospital, overseas advice from Maryland architects, law firms and consultants, offshore investments managed by local financial houses.

Hard to track

Such products are much harder for government bean-counters to track than something tangible that leaves a paper trail at each shipment point.

For that reason, many analysts believe that the Commerce Department under-reports nationwide service exports, which were booked at $218 billion last year.

But even if the $218 billion figure were accurate, it suggests that Maryland's service exports last year came to roughly $4 billion, assuming that Maryland's performance matched the national average and was proportional to the size of its economy.

Pub Date: 4/05/97

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