Some studies come across my desk with a high “huh?” factor. One from Ball State University’s Center for Business and Economic Research on “export adaptability” is among them. It measures the “adaptability” of states to meet the changing demands of members of the Organization for Economic Cooperation and Development (OECD) from 1999 to 2009.
The findings: The top five states achieving this are Nevada, West Virginia, Delaware and Utah and Indiana. Washington ranks 29th. “All five states produce large amounts of machinery, pharmaceutical, chemical, electrical and medical items, goods sought by members of OECD,” the report finds. All I can guess is that Nevada, an economic disaster starting from such a low baseline of doing anything but gambling and building houses, is a statistical anomaly. The Silver State is no longer even among the top 10 states in mining as a percentage of the overall state economy. The Great Recession may also have had a distortive effect. It certainly goes against what we do know: Washington as among the leading trade states; a record year for the Port of Seattle and Boeing doing well, especially in the export market. Maybe Ball U is measuring slot machines. But, as Andy Grove said, only the paranoid survive.
Trade junkies might find a new report on Southern California’s import/export situation more useful. It finds that the ports of Los Angeles and Long Beach will continue their dominance in West Coast trade, at least in the near-term. Then there’s the opening of the widened Panama Canal in 2014.
Seattle doesn’t have aspirations to be a mega-port similar to LA/Long Beach. Another important difference: Much of the traffic coming into Southern California goes to that highly populated region. On the other hand, it gives a sense of the competition. Here, the pressure is heightened by the rising seaport at Prince Rupert, B.C., built with the close collaboration between the government and the private sector, including the Canadian National Railway. Thanks to mergers, the CN has a speedway from Prince Rupert into the heart of the American Midwest, making it a direct and dangerous rival to Seattle and Tacoma. All of which means the Puget Sound region needs to get its act together on enhancing its infrastructure to quickly move goods from ships inland and vice versa.
Today’s Econ Haiku:
With IMF down
Investors worry how not
To slip on the Greece