Exports continue to grow at a rapid pace.
Over the last 12 months, export growth has been 10.7%, with more growth in goods and less in services. Our trade balance is declining, both the total balance and the non-petroleum balance.
Because of our large trade deficit, some people think we aren’t much good at exporting. Not true; we’re just better at importing. But look at exports: we have a $12 trillion economy here in the United States, and $1 trillion of exports each year. With exports growing more than twice as fast as the underlying economy, we are becoming MORE capable of producing for world markets each year, not less.
Exports should improve further in 2007. The rest of the world is showing good growth, even if decelerating just a bit from last year. Also, our exchange rate should decline a bit (except against Canada), increasing the competitiveness of U.S. exports.
Business Strategy Implications: If you have a good product or service, give some thought to international trade. If you’re currently active in trade, make sure you have the capacity to ramp up your volumes.