Even as Connecticut export growth to many parts of the world slowed in 2007, sales to countries in Latin America shot up an astonishing 82 percent to $740 million, tripling the growth rate of any other year in the past decade.
Venezuela and Aruba were the only two Latin American countries to lessen purchases from Connecticut businesses last year. Exports were up 11 percent to Mexico, which are not included in the Latin American calculations due to the county”™s membership in the North American Free Trade Agreement.
Because Hartford conglomerate United Technologies Corp. dominates Connecticut”™s export figures, it is difficult to gauge whether the change reflects a few big aviation contracts for UTC, or whether it is indicative of a broader trend in the Nutmeg State”™s economy. With UTC international sales up a mere 10 percent last year to regions outside Europe and Asia, it is possible other companies drove growth south of the border.
The export figures do not include services, one of the cornerstones of Fairfield County”™s economy.
The increase is converting pesos and reals into dollars at a critical moment, as the U.S. economy loses momentum in the wake of the mortgage-spawned credit crisis. In KPMG L.L.P.”™s recent survey of 85 mid-sized companies in Fairfield County and Westchester County, N.Y., half said their export revenue was up the last two years and 56 percent said they expect that figure to grow in the next five years.
“The middle-market companies in this general area are just getting started in expanding internationally,” said Carl DeProfio, a managing director in the Stamford office of KPMG L.L.P. “They haven”™t really focused on it before.”
Despite the new Latin spice in Connecticut”™s economy, just a handful of companies have joined the Latin America Trade Coalition, which is agitating for trade-promotion agreements with Colombia and Panama. Such agreements eliminate tariffs and other barriers to promoting trade ”“ when ratified by Congress, an agreement with Peru will remove duties on 80 percent of U.S. consumer products imported by that country.
Many U.S. exporters hope the retirement of Fidel Castro will open the Cuba market to normalized trade relations.
Companies lobbying for new Latin American trade agreements include the usual suspects: UTC and General Electric Co., based in Fairfield; as well as the perhaps more surprising inclusion of the Monroe Chamber of Commerce.
Overall, Connecticut businesses increased exports 12 percent in 2007 to $13.7 billion, a slower pace of growth than the previous year”™s 26 percent clip.
Despite a 7 percent drop in exports to Canada, the country remains Connecticut”™s largest trading partner at $1.8 billion in sales, followed by Germany and France.
Of markets with at least $100 million in exports, Russia was the fastest growing as exports there more than tripled for a second consecutive year. From just $11 million in 2005, Russia exports were $134 million in 2007.
Of the state”™s largest export markets, Switzerland had the sharpest year-over-year drop in purchases from Connecticut businesses at 50 percent, but the $208 million in exports there were still well above 2005 levels.
After a lull in 2006 China exports rocketed up 53 percent last year to $565 million, with transportation equipment the top category followed by chemicals. Connecticut trailed only Arkansas, Nevada and Utah for growth in China exports.
While exports to South Korea increased at nearly the same pace, overall sales to Pacific Rim countries rose just 11 percent, however, due to declines in Japan and Singapore.
