Exports now account for nearly 15% of GDP...
SINCE 2009, US exports have grown at a faster rate than GDP, writes Gregor Macdonald.
This is reflected in the weak, national recovery in jobs while export-oriented regions and export-sector jobs have fared much better. As US exports are nearing 15% of GDP, one wonders that a nation long accustomed to protecting consumption may finally have to think about protection, and enhancement, of production.
North America is very, very rich in natural resources. On a relative basis to population, especially when compared to Asia, North America is a veritable motherlode of timber, natural gas, coal, and arable land. The dependency the world maintains on North American food production, for example, is not new but the current drought-led devastation of the US corn crop serves as a reminder. Looking ahead, to a time when natural gas exports finally commence from British Columbia (circa 2015), I have to wonder how both the world–and the US–will digest our potential transition from consumer of last resort to critical provider of commodities.
A couple of thoughts, therefore, as the export economy continues to grow while stagnation and slow growth obtains more broadly in the US:
- Political pressures will transition further in Washington, from the strong Dollar post-war era to a weak or suppressed Dollar export-era. Currency, industrial, and export policies seen historically in Australia and Japan may be instructive, in this regard.
- Government investment may tilt further, towards infrastructure that smooths future increases in US export volumes. Inter-modal networks and port-related facilities may be the beneficiaries of significant public and private investment.
- Small business formation may coalesce around export sectors. In export heavy regions such as the Pacific Northwest and The Gulf Coast, jobs may boom. Entrepreneurship may also gravitate towards the export economy, and (if you can believe it) MBA holders may increasingly find better opportunities in the world of "real goods" than on Wall Street.
- Tensions between commercial export opportunities and their impact on the environment will rise. Such tensions are already appearing in the export of coal, but this is likely just the beginning.
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