Developing markets seek equipment and machinery for infrastructure build outs.By Peter A. Buxbaum, AJOTWith the United States economy continuing to exhibit troublesome signs in several areas, the exporting sector stands out as a shining beacon of success. In fact, the annual Economic Report of the President, released on February 11, highlighted the growth that exports are now enjoying. “The United States is the world’s largest exporter,” the report noted, “with $1.5 trillion in goods and services exports in 2006. In the three years from the end of 2003 to the end of 2006, real exports grew at an annual average rate of 8.3%, more than twice as fast as the overall US economy.” The president’s report attributes the recent growth in exports to three factors: “rising foreign income, the expansion of production in the United States, and changes in exchange rates.” These conclusions are borne out by the growth in exporting among US industrial manufacturers, who are increasingly succeeding in selling their wares in developing markets. Much of the growth in US exports is related to the continued building out of infrastructures in emerging markets. Countries in Latin America, Africa, the Middle East, and Asia are still in the process of expanding their cities, and building roads, hospital, and airports. They have the cash to spend on these projects, while the falling dollar has made buying American products all the more attractive. “Most US exports of goods are capital goods, consumer durable goods, and inputs that are used to produce them,” noted the president’s report. “Industrial supplies, which are often used in the production of capital goods and durable goods, account for 14% of non-energy US exports.” From 2003 to 2006, the fastest-growing markets for US exporters were India and China, according to the report, where US exports grew at an average annual rate of nearly 27% and 25%, respectively. In 2006, the US exported $85 billion worth of automobiles, auto parts, tractors, and trucks; $46 billion worth of electronic circuits; $43 billion worth of airplanes and aircraft; and $21 billion worth of parts and components for office machinery, the report said. Between 2002 and 2007, the US dollar’s real exchange rate depreciated by 22% against a basket of foreign currencies. That means that foreign buyers are able to receive 22% more US goods for their local currencies now as compared to six years ago. Caterpillar Inc., the Peoria, IL-based manufacturer has reported near-record revenues and profits for 2007, and has credited its increased exports for that stellar performance. The company reported revenues of $44 billion on the year and profit per share of $5.60, up 8.3% from $5.17 per share in 2006. “This results clearly demonstrate our global reach,” said corporate spokesman Jim Dugan. “Despite weakness in US markets, our sales and revenues increased 9%. We continue to see remarkable growth outside of the United States with particular strength in key industries like mining, oil and gas, electric power and marine engines. The industries we serve are becoming increasingly global.” Caterpillar’s sales of machinery and engines sales outside North America were up 25%, or about $4.6 billion, in 2007 over the year before, more than offsetting a $2.5 billion, or 12%, decline in North American sales. “This reflects solid 2007 economic and industry growth in most of the world outside North America,” said Dugan. “The strength of economies outside the United States, our broad global footprint and growth in integrated service businesses, all contributed to the growth in sales.” Caterpillar found robust demand for its machinery and engine exports in East Africa, the Middle East, Latin America, and the Asia/Pacific region. Machinery sales were down 11% in North America in 2007, but up by 38% in the East Africa/Middle East region, 24% in Latin America, and 31% in Asia/Pacific. Engines sales were down 14% in North America in 2007, but grew by 29% in the East Africa/Middle East