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Business Good for Arkansas ExportsPosted Thursday, December 27, 2012, at 8:39 AM
The value of products exported overseas by Arkansas companies rose by 6.5 percent last year, according to government agencies that help local businesses take advantage of opportunities in foreign markets.
Even better news is that for the first half of this year, Arkansas exports are on a pace that would result in even greater increases. During the first nine months of 2012 exports increased by 28.3 percent over the first nine months of 2011.
In an interview in Arkansas Business magazine, a representative of the Arkansas U.S. Export Assistance Center said that the recovery in 2012 would put exports back at the levels they were before the global financial crisis that caused a downturn in economic activity in 2009 and 2010.
The middle class is growing in many foreign countries, therefore they have more purchasing power than they used to have.
Another factor in the recovery of our exports has been the signing of free trade agreements that opened markets in Panama, Colombia and South Korea.
In 2011, the total value of exports from Arkansas was $5.6 billion, which was 6.5 percent more than in 2010. That is particularly good news because it reversed a decline from the previous year, when the value of our exports dropped by 2.1 percent between 2009 and 2010. The previous year saw Arkansas companies experience an even worse decline of 8.8 percent.
The recent good news is attributable to increased demand for Arkansas products in Indonesia (228 percent), Germany (178 percent), Brazil (170 percent and France (116 percent).
Food products accounted for $828 million of the exports from Arkansas last year.
Transportation equipment ($770 million), other agricultural products ($504 million), machinery ($602 million) and chemicals ($740 million) were other leading products that Arkansas companies sold in foreign markets.
About 78 percent of the Arkansas companies that export to foreign markets are small or medium sized, with fewer than 500 employees. In all, 1,627 companies exported products from locations in Arkansas. The large firms sold the bulk of the products exported. Even though 78 percent of the companies were small or medium sized, their sales represented 24 percent of the total value of products sold.
According to the International Trade Administration, 5.3 percent of all private sector jobs in Arkansas are in businesses that depend on exports. Of all the manufacturing jobs in Arkansas, 14.2 percent are in companies that export.
Our largest foreign market is Canada, whose businesses purchased $1.4 billion of Arkansas products in 2011. Second in importance was Mexico, where businesses bought $679 of Arkansas products. Asia accounted for the next three countries on the list: China ($413 million), Japan ($214 million) and Korea ($195 million).
These Arkansas cities were the leaders in volume of products sold overseas: Little Rock, North Little Rock and Conway - $892 million of products; Fayetteville, Springdale and Rogers - $568 million; Fort Smith - $428 million; Pine Bluff - $218 million; Jonesboro - $111 million and Hot Springs - $81 million.
On the other side of the same coin, companies owned by foreign companies employed 34,800 Arkansas workers. France, Japan, Britain and Switzerland were the major sources of foreign investment in Arkansas.
Arkansas State Senate Week in Review
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State Senator Robert Thompson (D) of Paragould serves in the Arkansas Senate.
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