NEW YORK: Train shipments to Canada are affected by the drop in exports, as are the profits of companies like Arctic Cat that derive much of their sales from the Canadian market.
The high U.S. dollar smothered any chance for export growth during the second quarter for Minnesota companies — especially with Canada, the state’s largest trade partner.
Exports to Canada fell 21 percent to $1.13 billion in the quarter.
“Wow, 21 percent. That’s a big chunk,” said Bob Kill, CEO of the manufacturing consulting firm Enterprise Minnesota.
Canada is the “go to” country of choice for both large and small Minnesota manufacturers because it’s the easiest, in terms of transportation, language and culture, in which to do business outside the United States, he said.
“But the exchange rate has changed very dramatically and quickly in the last nine months and that is affecting both large and smaller manufacturers,” Kill said.
Besides the U.S. dollar, the pullback in Canada’s own ailing oil industry has hurt export sales for several Minnesota clients, he said.
The Ports of Los Angeles and Long Beach, with some cargo loading cranes in the upright and idle position, are seen in this view from the San Pedro area of Los Angeles, Thursday, Feb. 12, 2015.
The Ports of Los Angeles and Long Beach, with some cargo loading cranes in the upright and idle position, are seen in this view from the San Pedro area of Los Angeles, Thursday, Feb. 12, 2015.
Overall, even though Minnesota performed better than the nation as a whole, shipments dropped 3.8 percent to $5.2 billion in the quarter ended June 30 compared with a year earlier, according to the Minnesota Department of Employment and Economic Development. Total U.S. exports fell 5.6 percent, with 38 states reporting drops in shipments.
The state report noted that smaller trading partners such as Belgium, Singapore and the United Kingdom also saw shipments from Minnesota slide — but none as severely as Canada.
But state officials also noted that trade to some regions grew during the quarter.
