New Report Provides More Complete Picture of Trade Activity
Exports are an important indicator of economic health and trends. Until recently, however, related data focused exclusively on international exports, rather than between metropolitan regions. The Brookings Institution recently established a new methodology to measure trade between regions, as described in Metro-to-Metro: Global and Domestic Goods Trade in Metropolitan America. This new data complements international trade data and can help regions better understand their specializations to inform decision making and support strategies that maximize economic potential.
Among the 100 largest U.S. metro economies, the Chicago-Joliet-Naperville, IL-IN-WI metropolitan region ranks third in domestic trade volume ($559.5 billion) and fourth in international trade volume ($98.2 billion). While the metropolitan Chicago region ranks third in terms of total goods traded ($657.7 billion), it only ranks 40th of the 100 largest U.S. metros in international trade share (14.9 percent), leaving much room for improvement. In 2010, 63 percent of the regional goods traded to other U.S. metropolitan regions were manufactured goods, with $128.5 billion in Chemicals and Plastics products, followed by $94.8 billion in Machinery and Tool products. Both these industries are classified as "advanced" because they invest heavily in research and development and employ a highly skilled workforce. Metropolitan Chicago maintains a competitive advantage in these advanced industries, as described in the CMAP manufacturing drill-down report.
The Brookings report emphasizes the opportunities of international markets if U.S. regions can expand their exporting activities. The data show several industries trading at a surplus -- generating beyond what local consumption requires -- suggesting these industries may be well positioned to export internationally. The Chicago region's greatest surpluses are in Chemicals and Plastics ($31.5 billion), Metals ($12.1 billion), Machinery and Tools ($6.8 billion), Transportation Equipment ($5.8 billion), and Mixed Freight ($5.4 billion).
State and regional leaders continue to develop strategies for promoting international exports. For example, the City of Chicago has invested in a strategy that aims to double exports from small- and medium-size businesses by 2017. The World Business Chicago Plan for Economic Growth and Jobs includes a strategy to "make Chicago a nationally leading exporter" and is examining the establishment of a Trade Acceleration Agency. In 2012, the Illinois Department of Commerce and Economic Opportunity launched an Export Advisory Council to help meet the state's goal of doubling exports by the end of 2014. In addition to these policy responses and support strategies, major transportation infrastructure investments like the O'Hare Modernization Program will provide additional capacity for air-freight, a key factor for increasing international exports.