Indiana’s Exports to the EU Reach New Record
As I have previously blogged, Midwest’s exports to Europe grow overall in 2010, and Indiana was no different. In fact, as Table 1 shows, Indiana’s exports to the 27 members of the European Union set a record high of $7.705 billion, which was an increase of over a billion dollars from 2009 or 16.5 percent. Indiana now ranks eight in terms of the dollar value of its exports to the EU among the 50 states. In addition, Indiana is seventh in terms of percentage of exports that go to the EU market and sixth in terms of EU exports as a percentage of GDP.
Interestingly, Indiana’s export boom appears to be fairly uniform, as all five major categories (those with values of more than $250 million) grew from 2009. In addition, “other”—which includes 26 NAICS categories ranging from $175 million to less than $20,000—also grew, although it is still only 70 percent of its value in 2008. As figure 2 shows, Indiana’s exports to the EU have grown across the spectrum over the past ten years (100% equals year 2000 values). However, the graph also shows the dramatic increase in exports of chemicals (which includes pharmaceuticals) over this period. In 2000, chemical exports were worth $1.05 billion and accounted for a little more than a third of the state’s exports to the block, but over that period chemical exports grew by 436 percent, so that they were now worth $4.59 billion (or 60 percent of all exports to the EU) in 2010. On the other hand, machinery has grown only 15 percent or $68 million over the same period.
This high reliance on chemicals puts Indiana apart from its neighbors, as chemicals are the second largest category of exports to the EU for all of Indiana’s neighbors (except Kentucky, where they ranked third). Given the importance of pharmaceuticals to the Hoosier economy, and the fact that the member states of the European Union have among the most developed health care systems in the world, it makes sense that Indiana should be a major American source of chemicals for Europe.