Exports may be the key to sustaining the U.S. manufacturing revival
The revival of U.S. manufacturing has been seen as a hedge against the negative performance of the rest of the economy, as the industry's gains have given some hope to executives across the country. Exports have played a large role in this comeback, and may continue to do so in the coming years, according to Industry Week.
The Department of Commerce's International Trade Administration (ITA) has long noted that the competitiveness of the U.S. manufacturing sector is based upon the ability of companies to export their goods in an efficient manner.
Peter Perez, the deputy assistant secretary for the ITA, noted that there is significant room for improvement in the role that exports play in the overall U.S. economy, as he addressed a group of manufacturing executives about a potential shift in the business strategy of many firms in the sector.
According to the news outlet, Perez noted that the U.S. still lags behind other countries in terms of how much of a role that exports play in terms of national gross domestic product.
Exports in the U.S. represented 13.8 percent of the GDP in 2011, but this number pales in comparison when looking at nations such as Canada and Germany, which had a high percentage of their GDP come from exports, 30 percent and 50 percent, respectively.
"Imagine what our economy and our employment figures would look like if exports were 15 percent or 20 percent of our GDP," Perez said.
Free trade agreements are essential to determining whether exports will be able to play a larger role in the U.S. economy in the coming years, Perez told the crowd of executives.
"Free trade agreements are good for America and they are good for manufacturing," he said, noting that the government has created an initiaitve to get companies to ship goods to even more countries. "If we can get these companies to expand their operations and activities and sales to other markets, it will make a huge difference for their bottom line, for their growth, for their employees and their community."
Certain states are looking to ramp up their exports, as Pennsylvania has launched a new program to promote innovation and efficiency to increase output.
The Pittsburgh Business Times reported that the new program, the Research for Advanced Manufacturing in Pennsylvania (RAMP), is funded through the state's Department of Community and Economic Development.