Alabama exports surging in unexpected corners of the world

Alabama exports surging in unexpected corners of the world
Alabama's key exports include automobiles, chemicals, primary metals, paper products and non-electrical machinery. (Made in Alabama)

It’s clear that 2016 was a stellar year for Alabama exports, with rising shipments in a number of markets worldwide, signaling even more optimism for the future.

The top five destinations for state goods and services – Canada, China, Germany, Mexico and the United Kingdom – remained relatively unchanged from 2015 and most showed year-over-year growth.

Overall, Alabama-made goods were shipped to 189 countries. A number of them, while not among the top five, showed significant growth in 2016, including Kuwait, Russia, Taiwan and the United Arab Emirates.

The Alabama Department of Commerce is always studying trade trends among state businesses and manufacturers, using the information to plan seminars and trips aimed at helping companies boost their export business, said Hilda Lockhart, director of Commerce’s Office of International Trade.

Economic engine

With Alabama’s 2016 exports reaching a record $20.55 billion, increasing 6.4 percent from the previous year, officials are looking to build on that momentum, Lockhart said.

“We know rising exports for Alabama companies in overseas markets means greater potential for new jobs and investment back home,” Lockhart said. “International trade is truly a local economic engine, and Alabama workers and communities benefit from the growth.”

U.S. Commerce Department figures show the state’s exports have risen 15 percent since 2011 and 48 percent since 2006.

Vehicles are the state’s top export, by a large margin. Other key categories include chemicals, primary metals, paper products and non-electrical machinery, a category that includes combustion engines, agricultural machinery, metalworking machine tools and much more.

Lockhart offered a closer look at some of the fastest-growing markets for Alabama exports, and what’s driving them:

  • ­KUWAIT: Alabama’s exports to the Persian Gulf country increased to $104.9 million in 2016, a 285 percent spike from the previous year. The largest increases were in fabricated metal products, chemicals and paper.

“This year Alabama was Kuwait’s No. 1 trading partner in the nation for fabricated metal products, perhaps due to the country’s recent expenditures on various hydrocarbon and petrochemical refineries, such as the $10 billion Olefins 3 plant,” Lockhart said.

Currently in the pre-execution phase, the Olefins 3 plant will produce 1.4 million tons of ethylene a year when it is completed. The petrochemical is commonly used in the manufacturing process.

  • RUSSIA: Shipments of state exports to Russia rebounded in 2016 to $102.1 million, after a poor showing the previous year, with major increases in the export of non-electrical machinery, chemicals and paper.

Alabama was Russia’s No. 5 trading partner among U.S. states for non-electrical machinery products.Russia’s demand for machinery is “driven by the government’s strategy to modernize Russian industry across several sectors, including power generation, transportation, defense, automotive and aerospace,” according to the U.S. Foreign Commercial Service.

Lockhart said the drop in exports in 2015 likely occurred because of the contraction in the price of oil that year, which caused a recession in Russia and other oil-producing countries.

  • TAIWAN: Exports from Alabama to Taiwan nearly doubled in 2016, increasing to approximately $200 million. The largest gains were in chemicals, computer and electronic products, and paper.

“Chemical exports alone accounted for more than half of the 2016 total, showing a two-year increase from $19.6 million in 2014 to $102.7 million in 2016,” Lockhart said.

The state was Taiwan’s No. 6 trading partner in the nation for chemicals, predominantly in the category of basic chemicals, which include industrial gases used in the semiconductor production process.

Lockhart said the semiconductor industry, including manufacturing, design and packaging, is a cornerstone of the Taiwanese IT economy, so it is likely that the increased exports are feeding into this sector.

  • UAE: Alabama firms shipped $467.8 million in exports to the United Arab Emirates in 2016, an increase of more than 100 percent compared to exports just two years earlier. Much of the growth took place in the categories of transportation equipment, non-electrical machinery and chemicals.

The state was the UAE’s No. 5 trading partner in the U.S. for transportation equipment, with this category alone accounting for $396.2 million of the export total for the year.

“Aerospace products make up the bulk of these transportation equipment exports as the UAE develops its burgeoning satellite and Mars mission programs, expands its military and increases investment in the commercial airline industry,” Lockhart said.

Meanwhile, other up and coming markets have shown significant growth over the past five years, and they could be potential targets of new, increased efforts to fuel trade, Lockhart said.

The countries include Vietnam, Oman, the Bahamas, Denmark, Finland, Kenya, Liberia, Hungary and Bosnia-Herzegovina.

This story originally appeared on the Alabama Department of Commerce’s Made in Alabama website.

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