December 2, 2016
LITTLE ROCK – Businessmen and state economic development officials understand that Arkansas is part of a global market place, and that many of their customers and much of their competition is overseas.
Last year Arkansas companies exported $5.9 billion worth of products and services. Since 2010 the value of Arkansas exports has risen 12.5 percent. Over a three year period the average rate of growth in Arkansas exports was 2.8 percent a year.
People in foreign countries represent 95 percent of the world’s customers and 70 percent of its buying power.
Arkansas ranks 37th among the 50 states in the value of exports, according to the Arkansas Economic Development Commission (AEDC). Canada is our top trading partner. Canadian companies buy about a fifth of all Arkansas exports. Mexico is our second largest trading partner and buys about 14 percent of all Arkansas exports, valued at $837 million.
Last year our smallest trading partner was Brunei, a small country on the island of Borneo southwest of the Philippines. A company there bought $2,540 worth of products from an Arkansas firm.
Electrical machinery was our largest export, accounting for more than 13 percent of the total value of goods shipped overseas from Arkansas. Japan, Canada and Mexico, in that order, were the top three destinations for electrical machinery manufactured in Arkansas.
Aircraft parts and equipment amounted to almost the same amount of Arkansas exports last year, or 13 percent of the total and $793 million in value. Machinery and mechanical appliances were a close third, accounting for 11.3 percent of all Arkansas exports. Plastics and organic chemicals ranked fourth and fifth.
Cereals, a category that includes rice, ranked sixth in the rankings of Arkansas exports. Paper and paper products were seventh and car parts were the eighth most export produced in Arkansas. It may surprise some people that meat products, which includes poultry, is ninth in the rankings of Arkansas exports.
Steel and dairy products are followed by arms and ammunition. Chemicals, rubber, optical and medical instruments come next, ahead of cotton.
International trade accounts for about a third of the Gross Domestic Product of the United States and directly or indirectly supports 11.7 million jobs nationwide.
The AEDC not only promotes the sale of Arkansas products in foreign markets, it also cultivates relationships with foreign companies that want to invest in Arkansas and create jobs here. For example, France, Great Britain, Belgium, the Netherlands and Germany combined account for almost 17 percent of all Arkansas exports.
Businesses in those European countries also own plants in Arkansas that are vital to our economy. There are 23 German companies in Arkansas that employ 1,600 people. There are 13 French companies that employ 3,700 employees and 11 British companies that employ 930 people. The Arkansas plants owned by European companies produce car parts, machinery, plastics, power tools, steel, cosmetics and heavy equipment.
Japan’s role in our economy is significant. Japanese companies employ 5,300 workers in 20 locations in Arkansas. China’s role in Arkansas is growing.
Brazil is the top South American presence in Arkansas. There are 10 locations in Arkansas owned by two Brazilian firms that employ 1,800 workers.