Connecticut has become more reliant on exports to drive gross state product growth during the past decade, according to a new report prepared by the Connecticut Economic Resource Center (CERC). In 2003, Connecticut exports as a percent of Gross State Product (GSP) stood at 4.5 percent, increasing to 6.6 percent of GSP in 2013. That growth, CERC points out, makes it “important to analyze Connecticut exports trends to understand how exports will impact Connecticut’s economy in the future.”
In 2014, approximately 46 percent of Connecticut exports were comprised of transportation equipment merchandise, which includes aerospace equipment. And approximately 45 percent of Connecticut exports went to four countries: France, Canada, Germany, and Mexico, according to the report, Eye on Economics – Export Trends for Connecticut.
Although Connecticut still has strong trade ties with Europe and the North American Free Trade Agreement (NAFTA) countries (Canada, Mexico), there has been “an obvious shift in export growth among its trading partners.” From 2013 to 2014, Connecticut exports to South America and Asia increased overall, while exports to Europe, Oceania, and the rest of North America (mostly Canada and Mexico) were “generally flat.”
From 2003 to 2014, Connecticut exports to Asia increased by 182 percent, faster than exports to any other region, according to the data. Economic growth in Asia was primarily driven by growth in China.
The shift in Connecticut export locations “can be partially explained by demand changes in regions that Connecticut trades with,” the report explains, citing changes in the appetite for exports in Europe and Asia. Europe, for example, has “experienced economic weakness since 2008 and has not fully recovered. It has been particularly hit hard by credit market constraints and unemployment, which has reduced consumptions levels, and thus demand for imported merchandise, the CERC report pointed out.
Looking ahead, the CERC analysis anticipates that Connecticut exports “may slow or remain flat” because of “weaker demand in Europe, where the majority of Connecticut exports currently go to; and Asia, which received the second largest amount of Connecticut exports in 2014.”
CERC is a nonprofit corporation and public‐private partnership that provides clients with objective research, marketing and economic development services. The organizations mission is to “provide services consistent with state strategies, leveraging Connecticut’s unique advantages as a premier business location.”
The report was developed by the CERC Research Department, including Alissa DeJonge, Carmel Ford and Matthew Ross.