Indicator 5: Exports
How Does Massachusetts Perform?
Massachusetts has seen some variability in the destination of its exports between 2011-2016, with destinations that have historically been important trade partners, such as the United Kingdom and Canada, purchasing fewer goods from Massachusetts businesses. Canada was the largest export destination for Massachusetts in 2016, even though exports to that country have declined 20% since 2011. Exports to Mexico (#2) and Switzerland (#4) have grown tremendously during the 2011-2016 period, in part due to large export growth in 2016. Exports to China (#3), the Netherlands (#8) and Ireland (#10) also experienced growth. Massachusetts is 13th among the LTS in exports as a percentage of GDP the same as in 2015.
U.S. exports continued to fall in 2016 for the second time since the Great Recession. After the decline from 2014-2015, total exports decreased by $111B from 2015-2016. National trends in declining export value have affected Massachusetts as well. Since reaching a post-recession peak of $27.9B in 2011, Massachusetts exports have averaged $26.2B annually over the following five years. The Commonwealth’s 2016 exports were $25.8B which, although $500M higher than 2015, were $400M (-1.4%) lower than the five year average and $2.1B (-7.4%) lower than in 2011.
Massachusetts’ top export commodities in 2016 consisted of Computer and Electronic Products, Machinery (except electrical), Chemicals and Miscellaneous Manufactured Commodities. Computer and Electronic Products have historically been the most exported commodity in the state and made up 26.9% of the state’s exports in 2016. However, there has been a 4.9% drop in the value of computer and electronic products since 2015, which likely contributes to the job losses seen in this sector over the last year. Exports in machinery (except electrical) did experience an increase in value from 2015.
Despite an uptick in global economic growth, the increased purchasing power of the dollar continues to hinder state exports as it becomes more expensive for goods to be purchased by international trading partners. The major currencies of the Commonwealth’s trading partners (Euro, Canadian dollar, Chinese yuan, Japanese yen, and Mexican peso) lost purchasing power against the dollar from 2015-2016. Massachusetts has also experienced a shift towards high tech services, which do not always show up in state-level export statistics. The U.S. as a whole has a positive trade balance in services exports.