Monday, July 26, 2010

Sacramento ranks 47th for export production

Brookings: Sacramento ranks 47th for export production

Sacramento Business Journal - by Kelly Johnson Staff writer

The Sacramento metro area ranks 48th in export jobs and 47th in total exports in a study that compares the nation’s 100 largest metro areas for production of U.S. exports.
The four-county region ranked 94th for export share of gross metropolitan product, with 6.3 percent.
The findings come from a study by the Brookings Institution, which examined the location of production of U.S. exports, particularly the nation’s 100 largest metro areas, between 2003 and 2008. The report was released Monday.
Sacramento produces $6.3 billion worth of exports a year, the Brookings report said. Some 6.3 percent of what the region produces was exported in 2008, supporting 43,235 jobs, the study found. Sacramento’s recent export growth was about average, increasing by 8.6 percent.
The region’s largest export industry is computer and electronic product manufacturing, the study said.
Topping the list for the largest amount of exports produced in 2008 was the New York/northern New Jersey/Long Island region with $85.16 billion in exports. Next was Los Angeles/Long Beach/Santa Ana with $78.54 billion. San Francisco/Oakland/Fremont came in sixth with $30.9 billion. Silicon Valley was 11th, with $22.79 billion.
A Sacramento international trade consultant who has read the report said in an e-mail that he has “serious qualms about the methodology used in the Brookings study to apportion exports among the nation’s 100 largest metro areas.”
“In the case of the Sacramento-Arden Arcade-Roseville MSA, that methodology would tend to overstate the value of locally produced exports, likely by a significant margin,” said Jock O’Connell, international trade and economics adviser for Beacon Economics.
The study “provides a rather distorted map of the state’s economic geography,” he said.
“Brookings apportions exports based on where value is said to have been added. The problem is that considerable value can be added in a manufacturing process at locations remote from where actual manufacturing occurs,” he said.
“Intel’s facility in Folsom is a classic example,” O’Connell continued. “Although its mission is pre-eminently (research and development), it is defined for statistical collection purposes as a manufacturing establishment. Allocating a portion of the nation’s exports of computer and electronic products to the Sacramento area solely because Intel’s Folsom facility adds value to Intel’s operations is seriously misleading. From a goods movement perspective, Intel Folsom has the profile of a community college campus.”
“This situation is commonly replicated throughout California, where high value-adding R&D facilities are routinely situated in high-cost areas that are often some distance from the generally lower-cost areas where goods are typically produced,” he said.