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State exports rise 36% to $7.6 billion

By David Smith

This article was published February 27, 2013 at 3:06 a.m.

— Arkansas exports jumped 36 percent last year, the second largest increase of any state in the country, the U.S. Department of Commerce said Tuesday.

Arkansas exported a record $7.6 billion in products in 2012, up from $5.6 billion in 2011. Only New Mexico, with a 42 percent increase,had a higher percentage gain in exports.

“It’s definitely good news to see exports increase,” said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock. “That means we’re producing something that the rest of the world is demanding.”

The top destination for Arkansas’ exports was Canada, which bought $1.7 billion in products from Arkansas, an 18 percent improvement from 2011.

Arkansas shipped $845 million in products to Mexico, $720 million to China and $365 million to France. Exports to France rose 117 percent last year compared with 2011.

“These export numbers represent good news for Arkansas businesses looking to grow their international sales, and many firms continue to adjust their international sales strategies accordingly,” Sean Kelley, director of the U.S. Commercial Service in Little Rock, said in a prepared statement. “Over the last couple of years, our office has seen an increase in the number of business clients who are serious about exporting.”

Arkansas’ largest export product is transportation equipment, which accounted for $2.1 billion in exports last year, almost triple the $770 million in transportation equipment exported by Arkansas in 2011.

The Department of Commerce doesn’t identify the largest exporting businesses in a state. But the largest single subcategory of transportation equipment - aerospace products and parts - accounted for $1.9 billion in exports last year.

Aerospace firms exporting from Arkansas include France-based Dassault Falcon Jet in Little Rock. Dassault makes corporate jets in France and the Little Rock division finishes them, installing seats, galleys and lavatories. Workers in Little Rock also add software packagesand paint the interior and exterior of the jets.

The increase in transportation equipment exports last year likely had a major effect on Arkansas’ exports to France and China. Dassault signed a contract with Chinese airlines in 2011 to supply five corporate jets at a cost of $53 million each.

Aircraft exports tend to be “lumpy,” with only a few aircraft exported some months and none in other months, Pakko said. But the planes are big-ticket items that effect exports significantly from year to year, he said.

The second largest category of exports from Arkansas was chemicals, with $925 million shipped in 2012.

Some of the largest chemical exports include resin, synthetic rubber, artificial fibers, soaps and cleaning compounds.

Food products accounted for the third largest Arkansas export, at $768 million last year. The largest subcategories of food products were meat products, with almost $450 million in exports, and grains and oilseed milling products, with $223 million in exports.

“Food manufacturing is a category that Arkansas has established a niche in,” Pakko said.

A leading food processor is Springdale-based Tyson Foods Inc. Tyson had $4 billion in exports last year from all of its U.S. locations, with primary markets being Brazil, Canada, Central America and China, the firm said in its latest annual report.

Nationally, the United States set a record for the export of goods and services, reaching $2.2 trillion in 2012, supporting almost 10 million American jobs.

Business, Pages 28 on 02/27/2013

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