Export volumes approach $400M in Springfield MSA

Exports are on the rise across the nation and in the Ozarks, according to a national report examining export volumes from metropolitan areas. The trend mirrors what one official believes could be a record year for Missouri exports.

In 2011, businesses operating in the five-county Springfield metropolitan statistical area sold $398.1 million in products to international customers, a 16.5 percent increase compared to the previous year, according to The Metropolitan Export Report.

The September report utilizes U.S. Census Bureau data collected for the Department of Commerce with the local help of the Missouri Economic Research and Information Center, according to Census Bureau spokesman Robert Bernstein.

After a 20 percent decline in 2009, local exports have climbed by 36 percent during the last two years.

Nationally, the 367 MSAs studied exported $1.31 trillion of goods, an increase of nearly 40 percent compared to 2009. The top 25 MSAs saw their exports increase by 17 percent last year compared to 2010. The New York metropolitan area was the nation’s top exporter with $105.1 billion. St. Louis cracked the top 25, landing at No. 23, while Kansas City ranked No. 36. Springfield, which came in at No. 221, held the fourth highest value of exports in the state behind the St. Joseph area, No. 185.

According to the report, export increases in the Springfield MSA – covering Greene, Christian, Webster, Polk and Dallas counties – were led by a 45 percent jump in machinery manufacturing. That industry category generated $96 million in export revenue in 2011, second only to electrical equipment, which garnered $97 million in international sales. Transportation equipment exports netted $61.8 million for area manufacturers.

Rita Needham, executive director of the 180-member Springfield-based Missouri Association of Manufacturers, said exports among local stainless steel manufacturers such as Paul Mueller Co. (OTC: MUEL) and transportation equipment manufacturers such as Ridewell Corp. are likely driving the trend.

“Orders are increasing now,” Needham said. “I think what you’re seeing is the start of economic growth again.”

Mueller Co. announced in November it was starting to build transportation equipment – the state’s top export category, according to the Missouri Department of Economic Development – joining the likes of Polar Tank Trailers and Acro Trailer in Springfield to sell aluminum tank trailers.

Department of Economic Development Director John Fougere said companies across the state are increasing their reach, and he expects 2012 to be a record year for Missouri exports. Last year, companies operating in Missouri exported $14.1 billion in goods, the highest amount on the books.

“We are ahead of last year by 1.2 percent,” Fougere said of the $10.7 billion in statewide exports through the third quarter. “As we’ve seen in previous years, the fourth quarter is a time when exports tend to really surge.”

Exports are a key to growing the state’s economy, he said.

“When exports rise, that’s foreign capital flowing into the state. It grows the economy. It helps businesses invest more and, most importantly, it helps them hire more Missourians,” Fougere said.

At John Deere Reman-Springfield, an agricultural machinery remanufacturer, export sales have risen by more than 15 percent each year since 2009, and the company is hiring 55 workers during a five-year period according to its $14 million investment plan. The core of the plan is a 275,000-square-foot manufacturing plant in the Strafford Industrial Business Park that John Deere Reman moved into in July.

Don Flatau, general manager of global operations and marketing for John Deere Reman, said this year’s exports sales are continuing the trend and represent about 20 percent of revenues out of the new Strafford facility, though he declined to disclose sales volumes.

“Certainly, our exports are climbing, but we don’t see a shift in the percent of our business that are exports,” Flatau said, noting most export sales are through the worldwide service and parts division of Moline, Ill.-based Deere & Co. (NYSE: DE), though some go direct to Canadian customers.

Fougere said Canada is Missouri’s top export destination, followed by Mexico and China.

Flatau attributed growth to John Deere Reman following an overall growth trend for Deere & Co. and the remanufacturing division as a relatively new option for Deere customers. Deere had partnered with SRC Holdings Corp. since the late 1990s to form ReGen Technologies Inc., and Deere bought out SRC’s ownership stake in 2008 to form John Deere Reman.

He said remanufacturing products stretches the farmer’s dollar, which is good in a down economy or in boon times.

“People are always interested in saving money,” Flatau said.

The DED, working with Gov. Jay Nixon, has had an aggressive approach to boosting exports, Fougere said. Nixon has led two trade missions to China and Brazil, and Fougere said those trips should help boost future Missouri exports. The China deal, for instance, secured $4.6 billion worth of agreements that will net Missouri companies $1 billion in exports during the next three years.

Fougere said as companies adapt to a global marketplace, many small businesses are finding their niche.

“There are small businesses across the state that maybe in another era would have never thought to take their products and sell them around the world,” Fougere said. “With the Internet and the reach of companies today, businesses in Springfield aren’t just competing with somebody in Bolivar, they could be competing with someone in Berlin or Beijing.”

Needham said the recent export growth is tempered by statewide concerns about the looming “fiscal cliff.” On Nov. 19, Needham was in Jefferson City for the first news conference for a bipartisan group of legislators and business leaders called Fix the Debt.

“I had one manufacturer tell me, ‘We are changing from a business strategy for growth to a business strategy for survival,’” Needham said. “Manufacturers are starting to voice their concerns.”