Metro Detroit exports rose 12% in 2012, 4th highest in U.S.

By JC Reindl
Detroit Free Press Business Writer

Driven by rebounding auto sales, exports from metro Detroit businesses rose 12% last year to $55.4 billion, maintaining the region’s standing as the nation’s fourth-largest exporter, according to a U.S. Department of Commerce report released Thursday.

The bulk of Detroit exports (66%) involved the auto industry — with $36.6 billion in merchandise classified as “transportation equipment,” the largest amount since 2007.

The three largest export regions were Houston and surrounding southeast Texas; New York-northern New Jersey-Long Island, and southern California, all the home of major international ports.

The second biggest export category for metro Detroit was machinery (9%), followed by computers/electronics.

The most frequent destinations were Mexico ($20.2 billion) and Canada ($16.8 billion). The report says Detroit again exported more to those two countries than any other metro region.

The jump in Detroit’s exports was nearly the same as last year’s 13% increase in U.S. auto sales.

“What it points to is this region is a high-tech manufacturing Goliath. We’re extremely competitive in worldwide markets,” said John Taylor, associate professor of Supply Chain Management at Wayne State University.

The government’s export report comes out annually and defines metro Detroit as Wayne, Oakland, Macomb, Lapeer, Livingston and St. Clair counties. The region represents about 73% of all Michigan exports.

The report counts physical merchandise exports, not intellectual property or Internet services, providing Detroit a leg up on information technology centers such as Silicon Valley and Seattle. Detroit also gets full export credit for finished products that are assembled elsewhere but sold for export by metro Detroit-based companies. Vehicles also have a big impact because they range in price from $15,000 to $70,000 each.

The region benefits from several key trade agreements, exporting $37 billion to the NAFTA region (Canada and Mexico) and $239 million to the five Central American countries and the Dominican Republican, according to the report.

The Detroit-Windsor border is the busiest international trade crossing between the U.S. and Canada and in all of North America.

There is a cautionary note amid the export growth. The U.S. as a whole continues to import more than it exports.

The total U.S. trade deficit with the rest of the world in goods and services was $535 billion last year, about $22 billion lower than 2011, according to U.S. Census Bureau data. The country had a $31.3-billion trade deficit with Canada in 2012 and $61.6-billion deficit with Mexico.

NAFTA “has increased imports as well as exports,” Taylor said, “but it’s increased imports more.”

After Mexico and Canada, metro Detroit’s next biggest export markets are Saudi Arabia ($4 billion) followed by China ($2.3 billion).