The Baltimore area's top export industries are well-positioned to grow, and metropolitan areas nationwide are expected to play key roles in helping boost U.S. exports — and job growth, according to a study released Monday by the Brookings Institution.
The study, Export Nation, offers what its authors say is the first in-depth look at the geography of exporting in the U.S., analyzing exports in the nation's top 100 metropolitan areas. The Baltimore metro area falls in the top third of that category, with $9 billion in annual export production and more than 74,000 export-related jobs.
Meeting the Obama administration's goal of doubling exports during the next five years will depend in large part on major cities, which produce 84 percent of the nation's exports and thus have the leverage for increasing trade globally, the report says. It says the 100 largest metro areas alone account for more than 64 percent of the nation's exports.
"The U.S. as a whole needs to focus more on exports as it comes out of the recession," said Emilia Istrate, a senior research analyst at Brookings and co-author of the report. "And metros are the vanguard of this transformation. Local economic development people in Baltimore and in metros around the country, large and small, have to connect and take advantage of their export potential."
The Baltimore area exported 6.8 percent of goods the area produced in 2008, the report said, and total exports have grown 7.1 percent annually in recent years, below the national average of 9.2 percent. Wages in the area's top export industry, chemical manufacturing, averaged $70,965. That compares with an average annual salary of $68,270 for the leading export industry in the top 100 metro areas.
Besides chemical manufacturing, Baltimore's major export industries include business, professional and technical services, tourism, computer and electronic product manufacturing and machinery manufacturing.
Istrate said Baltimore has great potential because of the potential of its top two export industries, chemical manufacturing and business services. Chemical manufacturing ranked second overall in U.S. exports and was the top export to Brazil and India, two of the world's fastest growing markets, she said.
Maryland has ramped up its export development program. This year, officials expect to increase the number of companies that get up to $5,000 in reimbursements for exporting expenses through the ExportMD program, said Brad Gillenwater, the Asia regional manager with the Maryland Department of Business and Economic Development's Office of International Investment and Trade.
"Our economy still hasn't turned the corner, but you do have markets.. that are growing," such as China, he said. "They're buying. ... We see international as providing opportunities for Maryland companies to increase their revenues."
The state has several foreign business development offices to assist Maryland companies identify partners, customers, markets and growth trends in foreign countries, including offices in Colombia, Eastern Europe, India, China and Israel. In fiscal 2009, state officials helped companies that exported $47 million worth of goods or services to China.
Towson-based Haemo-Sol, a manufacturer of surface cleaners used in the industrial and medical fields, has benefitted from the state programs. The small company, with four employees and $500,000 in sales, began exporting two decades ago, when international sales accounted for a tiny percentage of growth.
Now international sales account for about 68 percent of total sales, said Sierra Silkman, director of business development. China has become the company's biggest export customer. The company's markets also include Japan, the European Union, Canada and Vietnam.
"We've seen a huge shift from domestic to international growth as far as sales are concerned," Silkman said. "Our domestic business has kind of been on the downward trend, where international has been on an upward trend."
She said the state's International Investment and Trade office has helped the company secure business through a large distributor in China last year, boosting sales by $100,000. The company's cleaner is used in the process of manufacturing silicon wafers in China, a huge growth market for electronics manufacturing.
Among the Brookings report's national findings:
•Increasing exports will generate jobs. Currently, exports support 11.8 million jobs in the U.S. and 7.7 million in the top 100 metro areas.
•The biggest metro areas produce most of the nation's exports and the 10 metro areas with the highest value of exports produced about 43 percent of all the top 100 metros' exports in 2008.
•Export-intensive industries pay higher wages than domestic-oriented industries in large metro areas. For every $1 billion in exports of a metro-area industry, workers in that industry earn roughly 1 percent to 2 percent higher wages.
•Future export growth will come increasingly from large, emerging markets, with U.S. exports to Brazil, India, and China growing rapidly during the past decade.
The study recommends that the federal government negotiate for better exchange rates and trade policies, while metro areas create or strengthen metropolitan export initiatives.
"Exports have to be part of the new local economic development," rather than strategies that focus on "stealing businesses from each other, a zero-sum gain," Istrate said.
Text BUSINESS to 70701 to get Baltimore Sun Business text alerts