March 18, 2015
Using Data to Analyze Export Trends & FDI Decision Making
STEPHANE FRIJIA, DIRECTOR INTERNATIONAL BUSINESS DEVELOPMENT
GREATER PHOENIX ECONOMIC COUNCIL
Greater Phoenix Economic Council
Region’s Economic Development Organization
• A true regional model where public and private members collaborate to promote Greater
Phoenix as a great place to grow business
• Supported by Maricopa County, 22 cities and towns, and 170+ private-sector businesses
• Services include regional operating costs analysis; economic impact and labor studies;
HR employment assistance; connection to local resources, universities and companies;
site selection
• Since 1989, GPEC has assisted more than 600 companies in locating to the region resulting in
$13.4 billion in capital investment and more
than 110,000 jobs
Why Exports Matter
• Exports are critical to economic growth
• Every billion dollars of exports supports 5,590 U.S. jobs
• Exporters result in higher sales, 70% higher employment,
and 20% higher wages
Why Exports Matter
• The top 100 metros produce 76% of national economic output, 90%
of advanced industry jobs and 93% of patents
(Source: Brookings 2012)
• The next economy will be driven by metro areas – not the states and not the federal government
– Cities & towns are fundamental blocks of metro areas
• We need to be intentional in building the next economy, connecting
innovation, exports, and talent to become more competitive in the
global economy
• Demonstrate how exports benefit the region – or the city – and its workers
• Describe how a focus on international trade enhances or supplements existing regional initiatives
• Assess the region’s standing on key indicators relative to the nation and peer areas
• Know the drivers of the local economy – independent of export activity
• Know how key regional industries and clusters have performed in terms of exports
– Largest industries or clusters, by size and growth
– Industry or cluster employment concentration/share/location quotient – Anchor institutions (e.g., universities, large headquarters, non-profits)
Know your Export Economy
Start with knowledge of local market
Know your Export Economy
• Explore Export Data
– Understand key trends in the U.S. export economy (goods and services industries), including overall performance and largest and fastest-
growing industries and markets
– Examine the top international markets for key industries identified
• How is my region (city) performing in these growth area and key industries?
• What is the export performance of industries and clusters?
– Highlight those with the greatest potential to contribute to the region’s export growth
• Who are the local Export Players (survey)
– Federal, state, and local and private sectors
Greater Phoenix Export Economy
Economic Outlook: Current State
Pre-Recession Today
Consumption-based industry employment skyrocketed, but advanced industries lost employment
Consumption-based jobs surpassed pre-recession
levels, but advanced
industry jobs are below
2001 employment levels
Market Findings
Export Performance
• Population or GDP does not determine size of export
• $20.6B in International Exports – Ranked 17th
• Ranked 11th in 2003
• Ranked 96th in growth (8%)
• Added only $1.6B from 2003 to 2012
*For this analysis peer metros are ones with 2.5X larger population (in bold), and 2.5X smaller.
Source: Brookings analysis of data from Census, BEA, BLS, IRS, Moody’s Analytics, and NAFSA.
0 20 40 60 80 100
Los Angeles Houston Chicago Dallas Portland Atlanta Minneapo…
Phoenix St. Louis Miami Indianapolis Cincinnati Riverside Charlotte Denver Kansas City Tampa Nashville Columbus Orlando
Billion US$
$10B below median growth
Total Exports
2012
2003
Market Findings
Export Economy
• Lagging in export intensity compared to peer metros
• Export Intensity
(Export Value/GDP)
• 2003: 13.3% — Ranked 9 th
• 2012: 10.6% — Ranked 64 th
• 2.7% difference = $5.2 billion
• $5.2 billion = 29,000 jobs
Source: Brookings analysis of data from Census, BEA, BLS, IRS, Moody’s Analytics, and NAFSA.
Trade.gov. In 2013, every billion dollars of U.S. exports supported 5,590 jobs
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
Portland Houston Indianapolis Dallas Cincinnati St. Louis Charlotte Chicago Los Angeles Nashville Kansas City Minneapolis Phoenix Columbus Atlanta Riverside Denver Orlando Tampa Miami
2012 2003
Export Intensity
Market Findings
Activities and diversity of local industries drive exports value & volumes
Top Exports 2012
(Billion US$) 2003-12
Computers & Electronics $4.6 44.5%
Transportation Equipment $3.0 10.6%
Travel and Tourism $2.6 61.6%
Royalties $1.3 31.8%
Market Findings
Regional Export Economy & Performance
Goods exports: 10%
Service exports: 61%
0 1 2 3 4 5 6 7
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Billion USD Aircraft Products & Parts Goods Semiconductors Goods Precision Instruments Goods Financial Services Services
Metro Findings
Top Exports
• Phoenix manufacturers are mostly focused on domestic markets
• Top exports are high value
Commodity Group Int’l Flows Domestic Flows Value/Ton
Electronics 23% 77% 35,864
Transportation
Equipment 18% 82% 17,441
Machinery / Tools 15% 85% 7,191
Chemicals / Plastics 6% 94% 5,328
Agricultural Products 5% 95% 1,355
Metro Findings
Top 20 Exports
Industry Real Exports ($
Millions)
Export-supported Jobs
Industry Share of Exports (%)
Industry Concentration (% rel. to U.S.)
Annualized Export Growth 2003-2013
Computer & Electronic Products 3,264.7 15,726.9 17.1% 272.4% -7.0%
Transportation Equipment 3,177.7 17,355.0 16.6% 135.7% 1.6%
Travel & Tourism 2,301.1 12,676.9 12.0% 127.4% 5.4%
Financial Services 1,390.7 9,845.2 7.3% 169.4% 17.6%
Royalties 1,350.4 9,038.1 7.1% 107.1% 2.4%
Primary Metal Manufacturing 947.9 4,111.2 5.0% 139.4% 6.1%
Freight & Heavy Industry 824.9 5,704.4 4.3% 145.1% 0.4%
Management & Legal Services 682.5 6,230.4 3.6% 144.7% 5.9%
Chemical Manufacturing 670.0 2,218.9 3.5% 36.2% 14.1%
Mining 582.2 2,576.5 3.0% 293.4% 13.2%
Tech Sector 469.9 2,952.1 2.5% 75.2% 8.5%
Machinery Manufacturing 436.8 2,699.6 2.3% 31.5% 3.2%
Engineering Services 399.6 3,361.2 2.1% 124.0% 9.4%
Miscellaneous Manufacturing 392.1 2,453.9 2.0% 92.1% 10.0%
Educational & Medical Services 342.8 3,833.0 1.8% 107.4% 6.3%
Fabricated Metal Products 300.4 2,154.3 1.6% 71.8% 3.0%
Insurance Services 286.9 1,755.8 1.5% 182.6% 11.4%
Food Manufacturing 263.8 1,985.9 1.4% 40.1% 8.8%
Metro Exports
Strategic Goal
Construct a business environment that creates quality jobs, greater prosperity and economic
stability to Greater Phoenix by aligning the
region to global markets.
Greater Phoenix Export Plan
Preliminary Strategies
• Develop a regional model of export collaboration and coordination
• Unify, streamline, and leverage the delivery of export education and assistance programs
• Foster and advance service sector and advanced industry exports
• Strategically Promote assets and capabilities
• Support the advancement of infrastructure required to improve
connectivity with other international commerce hubs and assess and
develop export enabling infrastructure strategies
Greater Phoenix Export Plan
Strategy 2: Tactics
• Develop a unified, proactive and targeted company outreach program to promote available regional, state and federal export assistance services
• Connect more businesses to their global customer by facilitating the flow of targeted and tailored assistance, actionable information and support
provided by the International Trade Administration NEI NEXT. Streamline access to knowledge, services and expertise necessary to develop an export strategy, identify opportunities and pursue them by developing a centralized on‐line portal
• Work with incubators/accelerators and applied research assets in the region to deliver programs and services suited to early-stage and high‐growth
potential companies to reach global markets faster
• Streamline, through MPEXA, the coordination of international promotion,
trade missions, B2B, and investment opportunities forums
Core Export Data
Source
Export Type
Coverage
Methodology/Notes/Cautions
Export Nation Goodsand Services
Industries:
3- and 4-digit NAICS industries for goods, 11 major services industries with 34 detailed subcategories
Years:
2003-2014 Update:
Annually
Export source geographies:
Counties, metropolitan and micropolitan areas (with indicators for top 100), states – all by point of production
Export destination geographies: None Measures:
Total export value (nominal and real), export growth rates, export intensity (share of GDP), export LQs
Export Nation is the only source of data that provides
estimates for both goods and services exports, based on point of production, at the county, metro area, and state level. It will therefore be the primary data source for metro area market assessments.
Export Nation is designed to show where exported goods and services are produced, in contrast to Census methodology (see below). To estimate export volume by point of production, Brookings allocates national exports by industry to counties, based on county share of national GDP in that industry. For example: if King County (WA) produces 10% of national GDP in transportation equipment, Export Nation data assumes it produces 10% of national exports of
transportation equipment. While an estimate, Export Nation is highly correlated with data that tracks actual freight movement of goods.
Full description of methodology available in Export Nation 2012, and an abridged version in Export Nation 2013. Export Nation will be updated annually for the duration of the four-year Global Cities Exchange.
Core Export Data
Source
Export Type
Coverage
Methodology/Notes/Cautions
U.S. CensusBureau - USA Trade Online
*Note that USA Trade Online is subscription- based: $300 annually, or
$75 monthly.
Free one- week trials are available.
Goods Industries:
Up to 10-digit Harmonized System (HS) codes, 4-digit NAICS codes Year:
1992-2013 Update: Monthly
Export source geographies:
Ports, customs districts, states Export destination geographies: All world countries, international
organization and trade agreement areas
Measures:
Export value (also by
vessel/air/containerized), quantity, unit price (10-digit HS only), trade balance
Census data is collected through forms filled out by
firms or freight forwarders for all international shipments over $2,500.
Because the data reflects the ports from which goods are shipped (point of movement), regardless of where they are produced, Census data can’t be used for a comprehensive
metro area analysis.
Once focus industries have been identified at the metro level using Export Nation data, Census data allows for in-depth industry analysis at the national level. This is the most specific export data available, with 8,000 product categories and import and export volumes for every U.S. port, customs district, and state with every U.S. trading partner.
Census data can help answer the following questions:
• Where is a product in demand internationally, and where can a firm compete?
• Data on sales volume and price per unit for specific products exported to every
U.S. trading partner, allowing a firm to see the markets in which their prices could be competitive.
• What are the trends in exports of a product?
• Detailed, up-to-date data on U.S. exports by industry and country, with 20 years of data to analyze long-term trends.
• How are exported goods shipped out of my metro?
• Customs district and port data shows volume of goods shipped internationally
by vessel (including containerized portion) and air.
Core Export Data
Source
Export Type
Coverage
Methodology/Notes/Cautions
Bureau ofEconomic Analysis
Services (Goods data also here, but better at USA Trade Online)
Industries:
All major goods and services industries
Years:
As far back as 1960 for some data, typically mid-1980s to present Update:
Quarterly
Export source geographies:
National
Export destination geographies: Most large trading partners, as well
as country groupings (i.e., “Other Asia and Pacific”)
Measures:
Export value , trade balance
BEA only collects services data through surveys of
firms that have international sales of greater than $8 million per year.
Therefore, smaller services exporters are omitted from the data.
Further,
services data is extremely limited compared to goods data, with only 29 industry categories.
While most relevant data available through BEA is available elsewhere in a more accessible format (USA Trade Online for goods, and Export Nation for services), the official BEA website can be helpful in several regards:
· Frequent updates to national trade data, such as monthly reports on U.S. total exports and trade balance
· More recent data than Export Nation
(currently updated through 2013 Q3)
· Data on U.S. services exports by country and country grouping
· Data on imports, foreign direct investment, and other types of international transactions (such as transactions between affiliates)
Core Export Data
Source
Export Type
Coverage
Methodology/Notes/Cautions
Metro Freight Goods Industries:15 commodity categories, based on Standard Classification of Transported Goods (SCTG)
Years:
2010 Update:
None planned, but additional data will be released as part of the series
Export source geographies: Top 100 metropolitan areas Export destination geographies: International vs.
domestic Measures:
Total export and import value (international and domestic), weight of exported goods, value per ton, advanced industries share of trade, trade balances by commodity
Metro Freight assesses goods trade at the metropolitan scale.
The data is unique in two respects.
· It is an actual measurement of metro goods trade based on freight data from the U.S. Department of Transportation, in contrast to the GDP-based estimates in Export Nation.
· It tracks domestic trade (imports and exports), allowing metros to understand their trade relationships within the U.S. marketplace.
This data allows for analysis of a metro area’s strengths in goods industries, but it has several important limitations:
· Only one year of data, preventing trend analysis
· Only 15 broad industry groups, no services industries
Given these limitations, Metro Freight data is best used as a
complement to Export Nation data. Metro Freight provides insight on the value of goods shipped from your metro, the means by which those goods are shipped, and whether domestic industry
specializations are reflected in international trade volumes or balances.
Metro Freight data and profiles focus on “advanced industries”, such as chemicals/plastics, electronics, and precision instruments, that invest heavily in R&D and employ a highly skilled workforce. These industries compose 11 percent of the economy but produce 45 percent of goods exports.
Core Export Data
Source
Export Type
Coverage
Methodology/Notes/Cautions
Metro NorthAmerica
Goods Industries:
2-digit Standard Classification of Transported Goods (SCTG), 43 commodity categories
Years:
2010 Update:
None planned
Export source geographies: Top 100 metropolitan areas Export destination geographies: Mexican metropolitan zones (59),
Canadian census metropolitan areas (33) Measures:
Total export and import value (Canada, Mexico, North America), top metro trading partners (Canada and Mexico), top traded commodities (Canada and Mexico), share of global trade with North America, value per ton, advanced industries share of trade
Metro North America, based on the same underlying
data as Metro Freight, is the only data source that offers metro-to- metro trade data (though only within North America).
Besides its geographical limitation, Metro North America is less detailed than Export Nation in three respects: only goods industries, only large industry categories (15 total), and only one year of data.
While limited to North America, 40 percent of U.S. trade is with Canada and Mexico, and 58 percent of that trade is between metro areas, so this data might cover a large portion of any metro’s trade flows. Strong metro-to-metro trade linkages may provide the basis for formalized trade agreements, cooperation on infrastructure, shared skills initiatives, and so forth.
Like Metro Freight, Metro North America also focuses on advanced industries.
Core Export Data
Source
Export Type
Coverage
Methodology/Notes/Cautions
GlobalGateways:
International Aviation in Metropolitan America
Services Industries:
Tourism (aviation only) Years:
2003 and 2011 Update:
None planned
Export source geographies: Top 100 metropolitan areas Export destination geographies:
International metro areas, countries Measures:
Number of international passengers, change from 2003-2011, metro area of international passenger origin or destination, common transfer airports
Global Gateways provides data on passenger flows
between U.S. and international metro areas. These flows represent tourism exports from the U.S., as well as trade relationships more broadly.
This data supplements Export Nation’s tourism data by showing actual passenger numbers, as well as the international metro areas through which most passengers travel. These linkages can serve as a starting point for an analysis of which countries or regions could be focus markets.
