In 2011, Stephen Gandel of Time Magazine asked the question, ‘Can exports save the [US] economy?’ In his article, the economist argued that the case for exports may not be as simple as it seems:
“According to a recent study by the Department of Commerce, US exports have to rise $185,000 to produce one job.
“Our non-export economy tends to produce a new job at a rate of about $120,000 of economic activity. That means we have to produce an extra $65,000 of work to produce the same job when we go down the export route.”
It seems however, that Gandel may have been a tad tough in his assessment, as US exports last year totalled $2.2 trillion, and according to President Obama, every billion dollars represents 5,000 jobs (meaning on that basis, that roughly 11 million jobs have been created).
Export has also reportedly benefited Brazil’s economy this year, as the BRL’s currency fall against the dollar has actually been found to help boost its reliance on exports.
Brazil’s container trade with the rest of the world rose by 3.8 per cent from April to June this year, and that’s on top of a 1.6 per cent rise during the previous quarter.
With current US-Brazilian relations found strained due to the recent NSA scandal, Eduardo J Gomez of King’s College London argues that there could be even greater economic benefits to come as a result of US spying infringement:
‘A diplomatic rift with the US therefore seems to have led to a surge in Brazilian “soft power”.
‘Indeed, for Brazil, this setback with the US may eventually entail several economic and political benefits, in turn placing Brazil on a path of on-going economic prosperity and influence.’
As for Europe, gross domestic product rose 0.3 per cent from July to August this year, which is a huge relief after a 0.5 shrink only a year earlier.
Exports rose from 1.6 per cent in the second quarter from the previous three months, while imports increased by 1.4 per cent.
“There is some encouragement as most components of growth — exports but also consumption and investment — show some improvement.
“Figures for PMI and retail sales give some hope the second quarter wasn’t a one-off, but it’s still a modest recovery that falls a long way short of the growth rates needed to address the region’s fiscal problems.”
This of course, is also positive for SMEs that are beginning to rely on exports to bolster their own income; made far easier thanks to the increasing availability of foreign exchange companies such as 4xcurrency.com.
With Germany and Canada having being brought out of the Great Recession largely due to their reliance on their export sectors, the time is now for other countries, both in Europe and the Americas to realise the potential and benefit of manufacturing so that they can exporting their own goods.