Springfield News Sun Staff Writer
The region is building a rep as a good location for distribution centers and trucking, the latest example being the newly opened Procter & Gamble distribution facility near Dayton International Airport.
For a broad-based economic recovery, it helps when the products that move on the conveyor belts are manufactured locally or somewhere in the U.S.
A Dayton Daily News analysis of state import and export flow shows that in Ohio, among the strongest manufacturing states, vastly more manufactured goods consumed here come from other nations than are made in Ohio and exported to destinations outside the U.S.
Ohioans consumed $60.8 billion in foreign manufactured goods in 2014 and exported $48.5 billion in manufactured products — a $12.3 billion trade deficit.
To help support manufacturing exports, the federal government offers credit from its Export-Import Bank. Congress, mired in angry debates lately, is also caught up in squabbles about the bank. On June 30, temporary authority expires for the bank.
Critics say the bank favors giant multinationals like Boeing Co. and General Electric and that it doesn’t help small business enough. The bank could lose its charter.
But companies that employ far fewer than thousands of workers also depend on the bank, said James Baldwin, vice president of sales at McGregor Metalworking Companies in Springfield.
McGregor, with a payroll of 385 locally, supplies electric motor parts for General Electric that are exported around the world. While McGregor doesn’t rely on the bank directly, GE does. Baldwin just returned from Washington, D.C. where he lobbied Ohio’s Congressional delegation to support the bank.
McGregor said it sold $14 million in product to GE last year, sales that kept 40 to 50 people on the job.
“From our perspective, this is beneficial to all companies,” Baldwin said. “It helps level the playing field for U.S. companies. China does the same thing, India does the same thing. If we stop, the competition won’t stop. We’ll all get penalized and lose those opportunities.”
Both of Ohio’s senators, Rob Portman, a Republican, and Sherrod Brown, a Democrat, have expressed support for the bank, although Portman said he’d like to see reforms.
Ohio’s total trade deficit, taking into account all exports and imports including agricultural products and commodities such as oil, was $18 billion in 2014, the difference between $52 billion exported to other nations and $70.1 billion in international imports, U.S. Department of Commerce figures show.
Nearby Midwestern industrial states also ran large deficits in manufactured goods in 2014 including Michigan, $60.9 billion; Illinois, $38.2 billion; Indiana, $11.1 billion; and Pennsylvania, $34.5 billion. Wisconsin has more or less balanced manufacturing imports and exports at around $23 billion each in 2014. A report from the Brookings Institution last month showed the U.S. runs a trade deficit in all but a few advanced industries.
Export growth over the years of the economic recovery hasn’t turned the tables, or even reached a point of balanced trade, although U.S. Secretary of Commerce Penny Pritzker last month praised the latest trade data because it showed 26 states including Ohio achieved records in goods exports in 2014. But the release, like others from Commerce, only mentions exports and omits any mention of ongoing state-by-state trade deficits.
“Exports are critical to economic growth and job creation in communities across the country,” Pritzker said. “With 95 percent of the world’s consumers living outside the United States, opening more markets to ‘Made in America’ goods and services is fundamental to our nation’s competitiveness, job creation, and the economic security of our families.”
But critics say overlooking the trade deficit figures and just touting exports results in a one-sided view. More Ohioans would be employed — potentially hundreds of thousands — if the state’s international trade was balanced as part of a coordinated national strategy that discourages offshoring industry and jobs and importing billions more in products than are exported.
“If the nation runs massive trade deficits during this recovery, most of the states will as well,” said Alan Tonelson, an independent economist. “The real importance of the trade deficits among the states is political. The deficit numbers destroy a major talking point that’s spread by the off-shoring lobby because their data only focuses on exports. They claim that trade policy has been a success for the U.S. because exports have grown. It’s cherry-picking of facts.”
The Obama administration, as well as the administration of Ohio Gov. John Kasich, have advocated for growing domestic manufacturing to drive economic growth.
Obama recently requested $600 million from Congress for his administration’s National Network for Manufacturing Innovation initiative, a developing project with connections to Wright Patterson Air Force Base and the University of Dayton.
Baldwin is hopeful Ex-Im Bank will survive the fight. “Ohio is greatly impacted by the Ex-Im bank. We are one of the states with a lot riding on it and a lot of employment connected to it,” Baldwin said.
Top destinations for Ohio manufacturing exports in 2014 in billions.
Canada – $20.68
Mexico – $5.98
China – $3.9
United Kingdom – $1.77
Germany – $1.72
Nations with most imports to Ohio of manufactured goods in 2014 in billions.
China – $12.47
Canada – $10.46
Mexico – $7.3
Japan – $5.69
Germany – $5.5
Source: U.S. Dept. of Commerce.