Exports are a key component of any economy. Items that are exported from an economy are usually the “best” that economy has to offer. Exports compete in a global marketplace and provide an outside source of revenue. This article examines Utah and US exports during 2005, comparing goods produced and trading partners. Exports were worth $6 billion to Utah’s economy in 2005, roughly 6.7 percent of the state’s share of GDP (gross domestic product). For the United States as a whole, exports totaled $854 billion or 6.9 percent of GDP, so any discussion of an economy must include a discussion of exports.

Utah Exports

Figure 1

Utah’s largest trading partner in 2005 was the United Kingdom with $1.1 billion in Utah goods being sent to the UK. Switzerland was second with $777 million in Utah exports. Although there is no data connecting goods exported to buyer country, it can be safely assumed that both countries are buying large quantities of Utah gold. Canada, the United State’s overall largest trading partner ranks as Utah’s third largest export buyer. Japan and Belgium round out Utah’s top five. Figure 2 compares the US’s top fifteen export buying countries with Utah’s top fifteen. What is interesting is how different the state’s trading partners are from the US as a whole. Despite the proximity and ease of shipping to Mexico, Utah does very little trade with the southern neighbor while our ties to Western Europe are much stronger. In the east, Japan remains Utah’s largest trading partner while China is becoming a larger market for Utah goods. South Korea, Taiwan and Singapore are all buyers of Utah goods but are less important to the state than they are to US exports as a whole. Much of this has to do with the mix of goods offered by Utah in comparison to other states. Overall, as is shown in the last column of Figure 2, Utah’s strongest exporting markets are Switzerland, the UK, Belgium and the UAE (United Arab Emirates). This is a key piece of information because downturns in the economic situation in those countries and/or in the price of gold on the commodities market could impact Utah to a greater degree than the US in general.

Figure 2

Utah exported approximately $291 million in chips during 2005 or 1.1% of total chip exports. As the joint Intel/Micron venture in Lehi continues to expand, we can expect Utah’s share of this sector to increase.
 
Regional Comparison
 
Utah and its regional neighbors have very little in common when it comes to exports. In fact, there are only four commodities that the majority of the Intermountain states all produce. They are digital chips, parts for airplanes and/or helicopters, parts and accessories for computers, and analog chips. Most of the region has at least one export that is related to agriculture. Idaho, Montana and Wyoming have the largest share of agriculture commodities while Arizona has none. Mining also provides a large share of exports from all the states except Colorado. Finally, there is a large variance in how much each state exports relative to the size of their economy. Figure 4 compares the size of exports of each state to the size of that state’s GDP.

Figure 4

As the last line in the chart shows, exports from Arizona and Idaho comprise a larger percentage of the region’s exports than those states’ economies do—1.43 and 1.44 times, respectively. Utah exports are also greater than the size of the state’s economy warrants—1.39 times. Montana and Wyoming are at the other end. The real surprise is Colorado. Colorado is one of the two largest economies in the region, accounting for roughly 26.8 percent of the region’s GDP. Additionally, Colorado has been a leader in the high-tech economy since the beginning. Despite this, exports from the state are slightly larger than Utah’s at $6.7 billion while Colorado’s economy is roughly twice the size of Utah’s—$216 billion vs. $91 billion.
 
The key to the discrepancy may be in the types of products exported from Colorado compared to other regional neighbors. With the exception of beef and related products from the cattle industry, all of Colorado’s exports are high-tech manufactured goods. As manufacturing becomes more feasible elsewhere in the nation and around the world, businesses may find it less expensive to move large production facilities out of the state. Colorado may retain corporate offices and research and development for such companies as IBM and Ball Aerospace but the actual production is done elsewhere and credited elsewhere.
 
This observation reveals a limiting factor of the export series, it only focuses on goods produced and cannot account for services exported. As the US economy continues its shift from a goods-base to a services base, the export series fails to capture the value of such a shift. The value of these data is they show that Utah and its neighbors are still reliant on traditional extractive and manufacturing industries to compete in the global marketplace. There are only so many places that have gold deposits and the fact that Utah is one of them is the base on which we have built our exports.
 
Conclusion
 
Utah’s exports represent a broad spectrum of our goods-producing companies. The state has some unique exporters such as the naturaceuticals industry as well as more traditional sectors, such as mining. Utah also has some unique trading partners and niche markets. Additionally, the joint venture between Micron and Intel at the Lehi facility should also bring Utah a larger portion of the most critical export—digital chips. From the perspective of public policy, state and local officials need to continue to be responsive to the needs of these businesses. The vision of the state’s World Trade Center as well as projects such as USTAR and others can all assist Utah in creating goods and services the international market needs.
 

See Utah Economy: Part 1 An Overview of GDP, Jobs and Wages