MANUFACTURERS IN THE NEW North region have learned the lessons of sailing into the wind when it comes to international exports.
As trade winds such as a strong dollar and low oil prices have buffeted Wisconsin as a whole — statewide exports have declined slightly the past two years from 2014’s high — the metropolitan statistical areas that comprise the New North have seen growth thanks to successes in several key industries.
In 2016, the last year for which complete data is available, Wisconsin companies exported slightly more than $21 billion in goods and services around the world. That was down from $22.4 billion in 2015 and 2014’s record high of $23.4 billion.
At the same time, overall exports in the five MSAs that comprise the New North region grew to $4.6 billion in 2016, an increase of 4.6 percent from $4.4 billion in 2015 and up 7.6 percent from the $4.3 billion the region exported in 2014.
“The New North economy continues to find increasing capacity for exports, particularly for our manufacturers,” says Jerry Murphy, executive director of New North Inc. “To help sustain the growth we have seen, we need to continue to get good at moving our products to where those consumers are.”
Export growth in the New North region benefited greatly in 2016 from the strength of its machine and transportation manufacturing sectors. In the Oshkosh-Neenah MSA, for example, companies classified as transportation manufacturing equipment producers saw exports in that segment grow nearly $50 million, or 20.7 percent, in 2016.
Indeed, it was the strong growth of those two sectors that powered the region’s exports into positive territory, as most other sectors showed flat growth or slight contractions facing the same economic headwinds that slowed export growth around the state.
The strong dollar, particularly in relation to the falling value of the euro, makes equipment from the United States more expensive for foreign companies and governments to buy.
Falling oil prices around the globe, while welcome news for consumers, also can affect exports by slowing demand for industrial machinery related to mining and oil drilling.
Industrial machinery is one of the state’s top export products.
“We’re seeing impressive increases in all of our leading export categories,” says Katy Sinnott, vice president of international business development for the Wisconsin Economic Development Corp. “The importance of exporting in driving Wisconsin’s economy is clear, and we are hopeful this growth will continue.”
The New North region’s resilience in overcoming those challenges in 2016 may have paid even stronger dividends in 2017 and into the new year. While complete data is not yet available, preliminary numbers show Wisconsin’s exports rebounded in 2017.
During the first nine months of 2017, Wisconsin exports statewide rose 6.9 percent above the first nine months of 2016, from $15.78 billion to $16.86 billion, according to data provided by the WEDC.
WEDC expects the final numbers for 2017 to exceed 2016, says Mark Maley, a spokesman for the state’s economic development arm.
A big boost came from Wisconsin’s agricultural exports, which rose by 6.7 percent in the first nine months, with $2.6 billion in ag products exported to 144 countries.
Wisconsin’s export growth in the first nine months of the year was spurred by significant increases in shipments to Mexico, China and Saudi Arabia. Exports to Mexico jumped by 9 percent to $2.43 billion. Exports to China were up 27 percent to $1.32 billion. Shipments to Saudi Arabia increased by 73 percent because of an increase in military vehicle exports, most likely by Oshkosh Corp.
Overall, Wisconsin saw 2017 first-quarter increases in several key product categories, including electrical machinery, up 12 percent to $1.6 billion; vehicles and vehicle parts, up 25 percent to $1.5 billion; oilseeds, up 146 percent to $251 million; dairy, eggs and honey, up 28 percent to $225 million; and wood and wood products, up 11 percent to $191 million.
Industrial machinery, Wisconsin’s largest export category, increased modestly in the first nine months of 2017 after having contracted each year since 2013.