Maine sees slow growth in exports

AUGUSTA – So far this year, most states have seen the weak dollar help them boost exports, but Maine’s export growth is far slower this year than last, when exports were up nearly 14 percent over 2005.

“We, of course, only have part of the data for this year,” said Janine Bisaillon-Cary, president of the Maine International Trade Center. “I wish we were doing better. I expect it will improve this fall.”

The latest data from the MITC show that overall exports were up less than 0.56 percent at the end of August, compared with a 13.72 percent increase from 2005 to 2006.

There are some spectacular increases in exports in some areas, but the overall figures are held down by a 7 percent decrease in exports to the state’s largest trading partner, Canada. Much of the trade with Canada is in wood products, including paper.

University of Southern Maine economist Michael Hilliard said there are many opportunities for Maine companies with the weak American dollar. He explained that with their products and services costing less with the decline of the dollar, they are more competitive.

“I think we will see companies taking advantage of this and it should be with us for a while,” he said. “Changing the factors that led to the decline of the dollar will take time; it won’t happen soon.”

Bisaillon-Carey said she has had the opportunity to talk with the major exporters to Canada to find out what is happening.

“I do know there are changes going on in the demand for various wood species,” she said. “That may be affecting what is going on.”

Bisaillon-Carey said there has been “dramatic” growth in some areas of exports, even as some of the traditional exports have declined. For example, exports to Saudi Arabia are up 2,375 percent, mostly because of jet engines and jet engine parts. In 2006, the total exports to Saudi Arabia were $1.3 million; so far this year the total is almost $33 million.

“We often have spikes like this,” she said, “and then we see a big drop-off the next year.”

She said a better analysis of exports is over several years, noting that from 2002 to 2006, Maine exports increased by 33 percent. She said the reason the state has increased the pace of its trade show visits and trade missions is to diversify the state’s exports.

“We need to export more products to more countries,” Bisaillon-Carey said. “We are working on that.”

Maine Economic and Community Development Commissioner John Richardson said he was surprised at the slow growth in exports so far this year. He said given national trends, he would have expected growth of 5 percent or 6 percent.

“We really need to look at this over a period of years,” he said. “Last year we were up in the double digits, but the year before we were down a little. What is important is to keep at diversifying our exports.”

Richardson said export efforts have focused on paper products and electronic components because they are the two largest export areas, but he said there are efforts to find new markets.

“We are looking at agricultural opportunities,” he said. “We are looking at the marine resources issue, what can we export in the terms of fish stock, what can we export in terms of food stocks we have here in Maine. We are looking to diversify.”

Leaders of the Legislature’s Business, Research and Economic Development Committee are concerned at the slow growth in exports. Sen. Lynn Bromley, D-South Portland, said the state needs to invest more in programs that help Maine companies do more business overseas.

“If I were running the world, I would increase the budget of DECD [Department of Economic and Community Development] every year,” she said. “I would increase the budget of the Maine International Trade Center every year.”

Bromley said it is hard to persuade some lawmakers to invest in economic development programs with all the needs in education and human services. Rep. Chris Rector, R-Thomaston, the ranking GOP member on the panel, agreed. He said Maine’s economy is in transition and exports are new to many companies.

“We have a work force problem,” he said. “We don’t have a trained work force that can meet the demand of some of our employers.”

Richardson said Gov. John Baldacci’s upcoming trade mission to South Korea and Japan is part of a strategy to help Maine companies sell products overseas. He said the high-profile trips are only part of the effort, with many trade shows targeted as well as one-on-one help for companies seeking to export.