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Midwest’s Exports to Europe Grow Overall in 2010

February 17, 2011
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The data for exports from the U.S. to Europe for 2010 is now available, and some of the trends are striking.  The good news is that exports of good to the European Union from Indiana and its neighbors increased—except for Kentucky.  Considering that exports declined between 2009 and 2010, this is very welcomed news for Midwestern exporters.  As had I previously predicted, 2010 could be a record year for Indiana’s exports; helping fuel the state’s economy.   The data partially confirms this, with exports reaching $7.71 billion which is almost $700 million more than the previous record of $7.03 billion, which was set in 2009.

As Figure 1 shows (blue), this boom for Indiana now places it second in the neighborhood in the absolute size of its exports.  This is particularly impressive, as Indiana’s economy is only slightly larger than Wisconsin.  As the right side axis of Figure 1 shows (green), in relation to the state’s 2009 GDP (the last year data is available), Indiana and Kentucky are the only two states in the region that are above the national average of 1.69%.  Given that exports from the Bluegrass State to the European Union have fallen in the last year, Europe’s position in Kentucky’s economy is even more impressive.

In fact, Indiana and Kentucky have consecutively outperformed the Indiana’s other neighbors and the U.S. average in the growth of exports to the European Union since 2000 (figure 2).  The Hoosier State has led the way, as exports have increased by 250% in the past ten years, while Michigan’s economic problems are reflected in its exports to the EU.  Even in absolute terms, the Wolverine State’s European exports are lower in 2010 than in 2000, falling from $4.88 billion to $4.59 billion.

One of the arguments for adopting the euro is that it makes trade easier, and as figure 3 demonstrates, trade between the Midwest and those countries that use the euro has indeed grown since the creation of the euro.  For instance, during the last ten years, total U.S. exports to the 16 members of the Eurozone grew by 150%, while trade grew by 143% to the entire 27 country block.  Among individual states, the growth is even more striking.  Indiana again leads the pack, with exports to the Eurozone ballooning by 292% (as opposed to a “mere” 254% for the entire EU).  The other striking fact from figure 3 is the collapse of Kentucky’s exports to the common currency zone between 2009 and 2010.  During that period, exports fell from $4.23 billion to $3.17 billion.

The Indiana University European Union Center is dedicated to helping people understand these ties between the EU and the Midwest and how the EU functions.  As part of this mission, it will be offering a range of conferences on the EU aimed at the business community and local government.  In addition, we will be offering a one-day free workshop for teachers to learn more about the EU in Indianapolis on April 1.



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