Report: Indiana exports grew faster than the national rate, totaling $34.4 billion in 2012
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BLOOMINGTON, Ind. -- Indiana exports totaled $34.4 billion in 2012, setting a record high for the state, according to a new report from Indiana University's Kelley School of Business.
The same report, produced by the Indiana Business Research Center, said the Hoosier state's exports grew at a higher rate than both the United States and other Midwestern states.
Indiana exports grew by 6.6 percent while the national rate of growth was 4.4 percent. Midwestern exports increased by 6.1 percent. A year ago, Indiana exports totaled $32.2 billion.
Relatively speaking, exports are more important to Indiana than other states: Its dependency on exports ranks 11th nationally.
Tanya Hall, an economic research analyst at the IBRC and a co-author of the report, said the nation's exports slowed considerably in 2012 after two healthy, double-digit years of growth (21 percent in 2010 and 15.8 percent in 2011).
Indiana followed a similar pattern but had stronger export growth than the U.S. in 2010 and 2012.
"Indiana recovered quickly from the adverse effects of the Great Recession, but the economic turmoil of the eurozone countries and slow recovery worldwide reduced the acceleration in exports," Hall said in the report, "Global Positioning: State of Indiana's Export Activity, 2013."
"Fortunately the dominance of the Canadian and Mexican markets, together with the possible potential for expanding exports to the emerging BRICS economies, may diminish the negative effects of sluggish European growth."
The acronym "BRICS" was coined to define five large emerging economies: Brazil, Russia, India, China and South Africa.
The International Monetary Fund has predicted that Indiana's primary trading partners will grow by 1.2 percent this year and by 2.1 percent next year.
"It projects lethargic growth by the eurozone countries despite stronger performances by Germany and France," said Timothy Slaper, director of economic analysis at the IBRC and the other report co-author. The top three countries with expected growth in 2013 include China (8.5 percent), Brazil (4 percent) and Mexico (3.3 percent), and this growth is expected to sustain itself in 2014."
While Canada remains the largest market for Indiana -- exports there totaled $11.9 billion in 2012 -- China is becoming a key destination for state exports.
"Over the last 10 years, Indiana's exports to China have increased almost seven-fold," Hall said. "China is the dominant BRICS country and has had one of the highest growth rates for both imports and exports."
In 2012, Indiana ranked 22nd among the states in terms of the value of exported manufactured goods to China, but if agricultural products are included, the state's ranking jumps to 14th.
In 2009, Germany emerged as the third top importer of Indiana goods and continues to increase its purchases year over year. The value of exports to Germany rose from $1.8 billion in 2010 to $2.2 billion in 2012. Mexico is at No. 2 with $3.9 billion in exports last year.
Countries with the most vibrant growth over the past three years include Mexico (26.2 percent), Japan (25.2 percent), South Korea (19.8 percent) and Spain (19.6 percent).
In terms of dollar value of export sales by state, Texas and California dominate, with exports valued at $265.4 billion and $161.7 billion, respectively. Indiana comes in at 13th, and only three Midwest states exceed the Hoosier state's exports: Illinois, Michigan and Ohio. All are ahead of Wisconsin, Missouri, Kentucky, Iowa and Minnesota.
Also in the report:
- Pharmaceutical products regained the No. 2 spot among all export categories in 2012. If current trends continue, pharmaceuticals may become the top exported product in the near future. Among all states, Indiana has been the top exporter of pharmaceuticals since 2009. Key markets include Spain and France.
- Vehicles and parts remained the state's top exported commodity to Canada, although this category fell from 2011. Electrical machinery and plastics were two categories where the state strongly surpassed national growth rates.
- Since 1998, Indiana's annual export growth has outperformed the Midwest and nation 10 times, which the authors called "an impressive trend."
Support for the report came from the IU Center for International Business and Education.