New York has seized many of the challenges presented by globalization. However, in order to generate greater economic growth, much more needs to be done.

New York is the third largest merchandise exporting state in the United States. In 1999, New York exported $43.3 billion of goods worldwide — a significant source of economic growth. Based on the U.S. Trade Representative’s calculation of 10,917 jobs supported by $1 billion in merchandise exports (multiplier does not include service exports), this supported 473,000 jobs in New York. And if state service export data were available from the U.S. Department of Commerce and added, total exports would be considerably higher.

Export-related production is the primary source of new jobs in New York State’s manufacturing sector, according to The Public Policy Institute of New York State, Inc., the research affiliate of the Business Council of New York State, Inc. This is very important since New York’s exports support one out of every five manufacturing jobs, according to Export-Related Employment and Wages Estimates for Eight States, 1992 to 1996, a report published by the Indiana University Kelley School of Business.

Plus, on a national basis, the average hourly earnings in manufacturing were $14.38 (August 2000, Bureau of Labor Statistics). To generate more well-paying manufacturing jobs, exports need to become a priority.

New York Exports of Services Are Growing

The services sector is probably more important to the economic health of New York than to any other state in the nation. In 1998, private service-producing industries contributed $533 billion to New York’s gross state product (GSP), according to the Bureau of Economic Analysis’ Survey of Current Business. This accounted for 75% of the total GSP, a larger percentage than any other state. How much of this was exported?

According to testimony by David Catalfamo of the Empire State Development Corporation to the New York State Assembly, based on 1997 data, “A conservative estimate would attribute about 10% of national service exports to New York State.” Applied to 1999, this would translate into an additional $27.2 billion in New York State exports. Based on the U.S. Trade Representative’s calculation of 14,679 jobs sustained by $1 billion in service exports, this supported approximately 400,000 jobs in New York State.

New York State’s “non-merchandise exports of key industry clusters within the service sectors are at least as significant as are merchandise exports,” Catalfamo said. In his testimony he stated that, in 1997, New York exports of financial services were estimated to exceed $8 billion annually, distribution services accounted for $7 billion, and communications and media services accounted for more than $2 billion.

Financial, business, professional, and technical services are each an important element of the United States’ trade service surplus and extremely important to the New York economy. In 1999, U.S. financial services registered $13.9 billion in exports, compared with $3.6 billion in imports, and $24.3 billion in business, professional, and technical service exports, compared with $7.7 in imports, according to the report, U.S. International Services: Cross-Border Trade in 1999 and Sales Through Affiliates in 1998.

Service exports are anticipated to become a much larger generator of state economic growth — especially in the New York City region, the financial capital of the world. Trade agreements that open foreign service and financial markets will generate greater New York State employment and produce more revenue, laying the foundation for a stronger tax base.

About The Author John Manzella [Full Bio]

John Manzella, founder of the Manzella Report, is a world-recognized speaker, author of several books, and an international columnist on global business, trade policy, labor, and the latest economic trends. His valuable insight, analysis and strategic direction have been vital to many of the world's largest corporations, associations and universities preparing for the business, economic and political challenges ahead.




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