U.S. exports have experienced sustained growth over the past several years, lifted by the economic recovery and a renewed focus on exports at the national and state levels. President Obama set a target of doubling national exports from 2010 to 2014, and Governor Quinn formed an Export Advisory Council in 2012 in support of achieving the same goal at the state level by 2015. New data from the U.S. Census Bureau and the Brookings Institution reveal that the Chicago metropolitan statistical area (MSA) and State of Illinois achieved record levels of goods and services export values in 2012. Chicago demonstrated significant growth in a number of innovation-intensive high-tech1 sectors. WBC is partnering with Brookings’ Metro Export Initiative in support of the Plan for Economic Growth and Jobs strategy to make Chicago a national leader in exports. (For more on the research methodology, see “About the data.”)
As the April 2012 Index highlighted, a region’s volume of exports is a key indicator of overall economic health. Since 2002, goods exports in Illinois have grown at a compound annual growth rate (CAGR) of more than 10 percent, exceeding the national average of 8 percent. Data from the U.S. Census Bureau show that Illinois exported more than $68 billion in goods, ranking as the nation’s fifth-largest exporting state. Companies such as Caterpillar and John Deere led the way as they ramped up production to meet rising demand, particularly in emerging markets. Exports in Illinois in high-tech sectors accounted for nearly 20 percent, below the national average of 33 percent. However, more than half of the sectors―precision instruments, semiconductors, aerospace parts, computer equipment, audio and video equipment, commercial and service industry machinery, magnetic and optical media, and software―exceeded the national average.
The Chicago MSA exported $40.6 billion of goods in 2012, up an average of 10 percent annually since 2010. A number of Illinois MSAs also posted record export values in 2012: Bloomington, Peoria, and Rockford led the state with a compound annual growth rate of more than 20 percent since 2010. Danville and Urbana-Champaign also exhibited strong growth.
In addition, newly released data from the Brookings Institution2 confirm that 2012 was a record year for the Chicago MSA in a number of high-tech sectors. Seven innovation-intensive sectors saw record export values. In addition, certain innovation-intensive exports (commercial and service machinery, industrial machinery, industrial engineering services, audio and video equipment, pharmaceuticals, and R&D services) exhibited a particularly strong location quotient compared with the national average, indicating Chicago’s export intensity in these sectors. Pharmaceuticals, which is specialized and growing, led high-tech sectors in 2012 with exports valued at more than $2 billion. Industrial engineering services grew at a CAGR of 13 percent, the largest increase of measured goods and services from 2003 to 2012.
Several trends offer encouraging signs for Illinois’ future. While oil and natural gas account for much of the export growth at the national level,3 Exports in Illinois have been driven by manufacturing and a renewed focus on high-tech sectors. The state’s recent passage of extraction requirements will likely result in greater investment in oil and gas and a more substantial contribution from this sector going forward. Although exports values are affected by a range of factors—currency exchange rates, growth in developed markets and emerging nations, and economic and political stability, among others—Illinois’ diverse economy could help it weather volatility in the global market.
About the data
The U.S. Census Bureau provides the official record of goods exports by origin of movement, a measure that tracks where an exported good begins its international journey. For example, if Caterpillar produces a piece of mining equipment and ships it from Decatur directly to a mining operation in Palmarejo, Mexico, Decatur is considered the origin of movement. However, if Caterpillar sends the mining equipment to a Caterpillar Logistics facility in McAllen, Texas, where it is included in a combined shipment to Palmajero, McAllen is considered the good’s origin of movement (despite the fact that it was produced in Decatur). As a result, the U.S. Census data may not always accurately reflect where goods are produced. Brookings estimates goods and services exports according to location of production by incorporating data on geographic employment and output concentrations.
Update: More recent data reveal that companies in Illinois and Chicago continue to respond and remain competitive in innovation-intensive export sectors. Read more about exports in Illinois in the Innovation Index 2013 Quarter 3 Report.
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Illustration by Dieter Braun