Exports have been an American success story lately. This is
corroborated by the U.S. trade deficit falling from 6% of Gross
Domestic Product (GDP) in 2006 to the neighborhood of 4%
recently. A weaker dollar, in conjunction with stagnant wages at
home, has improved American competitiveness vis a vis China,
where pay scales have moved up.
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In September 2012, the U.S. Census Bureau and the U.S. Bureau of
Economic Analysis revealed that American exports stood at $187
billion and imports at $228.5 billion, and yielded a monthly
trade deficit of $41.5 billion, down from $43.8 billion in
August. Stronger exports led to the narrowest trade deficit in a
long time. Both merchandise and service exports have been on the
Not only have exports boomed, but the basket of exports has
evolved over time. Formerly, the export limelight went to big
corporations such as
The Boeing Company
). Today, a multitude of small and large companies are enjoying
success in overseas markets.
The services sector, a traditional American strong point, is
doing even better. We believe that companies operating in global
markets enjoy diversified revenue streams which may cushion them
Of late, U.S. engineering companies have staged a dramatic
comeback. Several companies based in the Midwest, such as
), are building in Asian and other economies. In the process,
they are creating jobs back home. In conjunction with cheap shale
gas from fracking, this export-led boom may be a second chance
towards industrialization for the Rust Belt of the U.S.
Based in Canton, Ohio, Timken uses its understanding of
management of friction, materials and transmission of power to
enhance the performance of machinery used in industrial settings.
The company operates in four segments: steel, aerospace and
defense, mobile industries and process industries. It had sales
of about $5,200 million in 2011. At Timken, almost one-third of
sales were outside the U.S. Emerging markets accounted for close
to $900 million of the company's revenues. Its sales in Asia
climbed 21% year over year.
Headquartered in Columbus, Indiana, Cummins designs, produces and
sells engines. It had sales of $18,048 million in 2011, up 36%
year over year, and generated 54% of its revenues outside U.S in
the most recent four quarters. Its far-flung operations across
China, Brazil and India partly insulate it from a slowdown across
industries or geographies.
Toro, based in Bloomington, Minnesota, has its centennial coming
up 2014. It is a provider of landscape maintenance and turf
equipment as well as irrigation systems. The company has a solid
base among golf courses through out the world. Toro had sales of
$1,884 million in fiscal 2011 and derived about one-third of its
revenues from international markets. Most of its export-driven
production takes place in America.
The services line item is showing buoyancy and not just in
traditional plain vanilla activity such as travel and tourism.
Instead, we see broad-based, value-added exports in such spheres
as consultancy, design, engineering and financial services. Many
of these knowledge-based companies may be unlisted. Two prominent
service providers doing well overseas are
Advertising and public relations major Omnicom Group has
benefited from the boom times in Asia. The company reported sales
of $13,873 million in 2011 of which it derived 49% from ex-U.S.
markets. It generated revenues of $3,017 million outside the U.S.
and Europe, up 30.7% year over year.
The success of Walmart International, a part of Wal-Mart Stores,
in China is well known. The company is now a major retailer in
that country, able to take on well-entrenched competitors despite
allegations regarding the lack of a level playing field for
foreign retailers. Walmart International's net sales, including
foreign exchange and takeovers, rose 15.2% to $125.9 billion in
fiscal 2012 (ended January 31, 2012). During the fiscal year, the
company opened (including acquisitions) 1,094 stores and added
42.2 million square feet of space. It is slated to add 30 to 33
million square feet of area in fiscal 2013.
Prominent education and financial data company
The McGraw-Hill Companies
) with leading brands such as Standard & Poor's Rating
Services reported flattish sales of $4,248 million in the U.S. in
2011. Its revenues from Asia jumped 11.6% to $557 million with
Europe also doing well, up 11.5%, at $1,101 million.
We may be witnessing a resurgent America with broad-based success
in the critical export markets of Brazil, Russia, India and China
and South Africa (aka BRICS). However, many battles lie ahead for
U.S. exporters. Proprietary technologies in bio tech are expected
to play an increasingly greater role. We watch
) efforts to shore up growth with greater penetration in the vast