Growing Exports

We all hear about America's trade deficit. The USA imports far more from other nations than it exports. (Why, exactly this is a problem is rarely discussed.) However, our exports are growing as discussed by this piece in the Washington Post article (free registration required). The article discusses the growth in exports:

In the first 11 months of 2006, U.S. exports reached $1.31 trillion, a jump of 13.1 percent over the corresponding period in 2005, the Commerce Department said. That was an improvement over the 10.7 percent gain of the year before.

Exports to China -- whose dominance on American store shelves stokes worry -- increased by 33 percent in the first 11 months of 2006. Combined with Hong Kong, China now stands as the United States' third-largest export market, behind only Canada and Mexico.

One concern often expressed about trade is that we are losing our manufacturing jobs. The Post comments:

But even as exports have improved profits for American companies, they have not meant more jobs for American factory workers. In 2006, the United States had 14.2 million manufacturing jobs, according to the Labor Department, roughly the same number as in 2004. American firms have managed to squeeze more goods out of their plants with the same number of workers.

"Growth in output has not been fast enough to require manufacturers to expand the workforce," said David Huether, chief economist at the National Association of Manufacturers in Washington.

Manufacturing is strong in the US but labor productivity grows so fast that employment does not keep pace. Indeed the only way to get more manufacturing jobs is to export, our own economy just cannot grow fast enough to keep up with productivity increases in manufacturing.

Finally, the Post article gives some insight on America's comparative advantages.
Surviving manufacturers have gone high-tech, supplemented by dozens of new entrants: firms specializing in medical technology, electronic commerce, software and telecommunications equipment. The town of 60,000 people -- nearly 10 times its population in 1970 -- boasts 50,000 full-time jobs.
"There's an international wage rate for turning a screwdriver, and we're never going to be able to compete in that market," said Scott H. Neal, the city manager. "But the high-technology, high-intellectual-capital, design-and-testing work is going to be done here." Read it all.