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MinnEcon Blog
Bill Catlin

Minnesota’s exports continue to lag U.S. average

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Minnesota used to brag about the state's manufactured exports.

The following comes from the Minnesota Department of Employment and Economic Development's 2004 annual report on exports.

Although state exports grew slightly slower than the nation's 12.9 percent growth, Minnesota has long been outperforming national trends. Between 1998 and 2004, Minnesota manufactured export growth was 22.2 percent compared to U.S. export growth of 2.5 percent, adjusted for inflation.

Manufactured exports are things that are made, not grown, and exclude services such as travel.

And although they reached a record $18.4 billion last year, the growth rate of Minnesota exports has lagged the national average in five of the past six years. And in 2009, they beat the US average only by plunging a little less.

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Why care? Here's what the 2011 report says:

Exports are critical to the state economy. Manufactured exports are responsible for an estimated 114,900 jobs in Minnesota, ranking 15th largest among all states, according to the International Trade Administration of the U.S. Department of Commerce (based on 2009 data). About 57,100 of these export-related jobs are in manufacturing, while another 57,800 export-related jobs are in other industries such as marketing and sales, transportation, and logistics - key sectors in delivering goods to export markets.

I've asked the folks at DEED if they have any theories on why the switch. I'll update once I get a reply.

So, how bad is this lagging trend? The answer changes a lot depending on how far back you look.

If Minnesota's export growth had matched the U.S. rate since 1999 the state's factories actually would be selling less stuff overseas than they are now--$1.4 billion less. That would mean fewer export related jobs.

On the other hand, if Minnesota's export growth had matched the U.S. rate since 2005, when Minnesota's pattern of outperforming the U.S. changed, the state's factories would have sold $3.5 billion more stuff abroad.

Bottom line? Nothin' more than the obvious: better to outperform the US average than to trail it.