November 15, 2024
Business

Export expectations: Recent slowdown worries state

AUGUSTA – From 2000 to 2004, Maine exports were booming. They increased faster than the nation as a whole with a 37 percent spike in exports. But through October 2005, exports were down 9.2 percent for the year.

“This year we have stumbled a bit, although we are still growing,” Economic Development Commissioner Jack Cashman said. “We were really booming there from 2000 to 2004 with a 37 percent increase.”

The Maine International Trade Center, which gets funding from the state, said exports actually started to slow down last year, but the statistics were skewed by a one-time export of oil drilling equipment.

“The one-time $250 million export of oil rigs in 2004 skewed Maine’s export statistics,” Cory Crocker of the MITC said. “Taking out the shipment of the oil rigs, Maine’s export total was actually less than the 2003 total.”

MITC President Richard Coyle said if the one-time “aberration” is backed out of the numbers, exports are up 3.3 percent from 2004 through October of this year.

But Cashman acknowledged that growth is down from a few years ago and that Maine is still not seeing as much growth this year as the national average.

“We are seeing real growth in some areas,” he said. “We are growing and that’s better than not growing.”

The increases so far this year are led by the pulp and paper sector, the overall largest source of exports. Through October, pulp and paper exports were up $36.5 million. Wood products were up $13 million and industrial machinery exports, which include computers, were up $14.7 million.

“What we are trying to do – and we having been doing for the last year to year and a half – is to diversify our exports,” Cashman said. “We are getting more Maine companies involved in exports.”

He said the recent trade mission to Cuba, which generated a $20 million commitment from the Cuban government-owned import company, is an example of how the state is seeking to diversify its exports.

“Potatoes and apples and wood products were part of the contracts signed down there,” he said. “There were a number of folks in the group that went down to Cuba that had never exported before.”

This was the most recent of several trips abroad to trade Maine goods with other countries. In October, there was a mission to France; in 2004, to Germany and Italy; in 2003, to Ireland and the United Kingdom. Agreements were signed that totaled $33.9 million in trade for Maine businesses.

“We need to do a lot more in exports,” said Sen. Lynn Bromley, D-South Portland. “I have been pleased with the efforts made by the MITC, but we are competing with other states in a global economy and we just have to do more.”

Bromley, who co-chairs the Legislature’s Business, Research and Economic Development Committee, said she does not believe there will be additional state funds to invest in export development, even though there should be. Rep. Chris Rector, R-Thomaston, the lead GOP member of the committee, agreed.

“I think there have been a variety of factors that have led to the slowdown,” he said. “The MITC and Maine & Company have been helping Maine companies get ready to export their products, and perhaps we could do more to support their efforts.”

Both Bromley and Rector serve on the Maine Economic Growth Council and said there has been some discussion of the slowdown in exports. But they said there were no conclusions that different approaches or changes in state policy are needed to encourage exports.

The drop in exports also drew the attention of the Federal Deposit Insurance Corp. that regularly issues reports on the state’s economic health. The fall report noted that in 2004 Maine’s exports accounted for just 5.6 percent of the gross state product, significantly less than the 7 percent for the country as a whole.

Cashman said he has no doubt the state should be doing more to encourage Maine companies to export their products. He said despite the increased trade in recent years, Maine is still below the national average.

“You can always do more,” he said. “I think the folks at the International Trade Center are doing a good job in holding seminars and helping businesses export, but we can always do more.”


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