ILMA Compoundings September 2016 - 26

INTERNATIONAL INSIGHT Outlook on U.S. Exports: Forecasting the "Perfect Storm" or Something Else? Kevin Krause M any of us are familiar with the term "perfect storm." This cliché implies conditions are ideal for the creation of a pending negative event. Recently, it has been used to describe the outlook for U.S. exports. Exporters continually hear the rumbles of thunder from the industry and economic press decrying the long-standing trade imbalance for the United States and its trading partners, recounting the fact that imports significantly outweigh the exporting of goods. not limited to, commodities such as commercial aircraft, industrial machines, semiconductors, telecommunications, electric apparatus and medical equipment. The United States continues to be a leader in the development and production of these mid- to highvalue goods. The final third of U.S. exports consists of industrial supplies This imbalance has been a reality for more than 20 years, as market conditions favored the creation of goods overseas, mainly in China. With the strong dollar, U.S. goods are, and have been for a while now, more expensive than locally produced goods. Critics suggest this may be the perfect storm for continued flat or a downturn in U.S. export volumes. Daily indicators point to an export forecast that is much less than stormy, but the big picture suggests otherwise. The diversity of commodities and cargo values alone creates a solid foundation for export growth while minimizing volatility when other market factors, such as currency, geopolitical shocks to the market and fuel prices, can adversely affect the growth of U.S. exports. As economic history dictates, countries that rely significantly on a few large commodity segments face a greater exposure risk to export growth. This can be illustrated by the recent drop in fuel prices, which took a large toll on countries heavily reliant on oil exports, like Russia. A Diverse Mix of Goods is Driving U.S. Exports Consider this: The U.S. export commodity base is a diverse mix of goods and is well balanced across many commodity segments and cargo values. Aside from scrap and recycled products, the remaining two thirds of U.S. exports are diversified over the material goods segment.1 This includes, but is Partially finished goods or consumer goods, which make up an estimated 23 percent of the total goods being exported,2 include automobiles, automotive and vehicle parts, foods, mobile phone components, feeds, beverages and pharmaceuticals. Other commodities, such as textiles and glass, will remain in demand in Southeast Asia and Middle Eastern countries with heavy construction projects underway. These commodity sectors are anticipated to be the largest contributors to U.S. export growth between now and 2030.3 and equipment, chemicals, fuel oil, petroleum products, resins, plastics and nonmonetary gold. These are also commodity segments in which the United States is a long-standing leader in production. Additional Factors Affecting U.S. Exports Aside from the commodity mix, there are many other factors that make exporting from the United States ideal in the shortterm and make the 4 percent estimated growth attainable.4 Vol. 66 No. 9 * 26 * September 2016 Compoundings

Table of Contents for the Digital Edition of ILMA Compoundings September 2016

FROM THE CEO
BOARD BRIEF
NOTES FROM MSCI
THE HEART OF ILMA
THE ARGUS ANALYSIS
VOICES & VIEWS
INTERNATIONAL INSIGHT
SPEAKER SPOTLIGHT
FAMILY BUSINESS
FINANCIAL FREEDOM
RULES & REGS
POWER PLAY
LEGAL EASE
THE WHITE PAPER
ADVERTISERS INDEX
ILMA Compoundings September 2016 - 1
ILMA Compoundings September 2016 - 2
ILMA Compoundings September 2016 - 3
ILMA Compoundings September 2016 - 4
ILMA Compoundings September 2016 - FROM THE CEO
ILMA Compoundings September 2016 - 6
ILMA Compoundings September 2016 - 7
ILMA Compoundings September 2016 - 8
ILMA Compoundings September 2016 - BOARD BRIEF
ILMA Compoundings September 2016 - 10
ILMA Compoundings September 2016 - 11
ILMA Compoundings September 2016 - 12
ILMA Compoundings September 2016 - NOTES FROM MSCI
ILMA Compoundings September 2016 - 14
ILMA Compoundings September 2016 - THE HEART OF ILMA
ILMA Compoundings September 2016 - 16
ILMA Compoundings September 2016 - 17
ILMA Compoundings September 2016 - 18
ILMA Compoundings September 2016 - 19
ILMA Compoundings September 2016 - 20
ILMA Compoundings September 2016 - THE ARGUS ANALYSIS
ILMA Compoundings September 2016 - 22
ILMA Compoundings September 2016 - 23
ILMA Compoundings September 2016 - VOICES & VIEWS
ILMA Compoundings September 2016 - 25
ILMA Compoundings September 2016 - INTERNATIONAL INSIGHT
ILMA Compoundings September 2016 - 27
ILMA Compoundings September 2016 - SPEAKER SPOTLIGHT
ILMA Compoundings September 2016 - 29
ILMA Compoundings September 2016 - FAMILY BUSINESS
ILMA Compoundings September 2016 - 31
ILMA Compoundings September 2016 - FINANCIAL FREEDOM
ILMA Compoundings September 2016 - 33
ILMA Compoundings September 2016 - RULES & REGS
ILMA Compoundings September 2016 - 35
ILMA Compoundings September 2016 - POWER PLAY
ILMA Compoundings September 2016 - 37
ILMA Compoundings September 2016 - LEGAL EASE
ILMA Compoundings September 2016 - 39
ILMA Compoundings September 2016 - THE WHITE PAPER
ILMA Compoundings September 2016 - 41
ILMA Compoundings September 2016 - ADVERTISERS INDEX
ILMA Compoundings September 2016 - 43
ILMA Compoundings September 2016 - 44
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