Despite recent economic glitches, export growth reflects long term positive trends By Peter A. Buxbaum, AJOT Exports of U.S. construction and agricultural equipment increased dramatically in 2011. Demand for such equipment in South America was one of the key drivers of that growth. Overall exports of construction equipment increased 43 percent in 2011 for a total $23.5 billion of machinery shipped to other nations, and U.S. agricultural equipment exports increased 23 percent in 2011 compared to the previous year for a total $11 billion of machinery, according to statistics released by the Association of Equipment Manufacturers, a trade association headquartered in Milwaukee. In 2010, construction equipment exports grew by 28 percent and agricultural equipment exports grew by 12 percent following dramatic declines 2009 in both categories during the depths of the recession. Construction machinery exports to South America increased 39 percent in 2011 with purchases worth $4.3 billion, and exports of construction equipment to Central America gained 23 percent and totaled $2.0 billion. Agricultural machinery exports to South America increased 31 percent in 2011 with purchases worth $1.3 billion, and exports of agricultural equipment to Central America gained 14 percent and totaled $1.0 billion. The export growth to Latin American testifies to the growth of economies in that region and to the prospects for future growth despite recent hiccups. South American economies such as Brazil, Colombia, and Argentina have been on a tear in recent years with growing middle classes interested in consumption and increased investments in infrastructure projects. Brazil and Argentina are leading agricultural exporters. A recent drought has negatively impacted agricultural exports and the euro-zone crisis has also dampened short-term economic expectations, especially in Brazil. But increasing equipment imports and investments in construction and agricultural equipment tell a different story for the long term. “Export sales continue to help U.S. construction equipment manufacturers stay open for business and sustain American jobs, especially with the domestic construction sector still recovering,” said Al Cervero, AEM vice president construction sector. “Export policies such as free trade agreements are proven to spur economic growth.” The positive global agricultural environment continues to spur business growth for U.S. farm equipment manufacturers. “Despite uncertainty in some markets, there remains a solid fundamental demand for food supplies to meet growing worldwide needs,” says Cervero. “Exports continue to provide a substantial boost to manufacturers’ overall business as producers around the world seek enhanced productivity to meet global food needs. There is a growing need in developing countries to provide adequate energy and food supplies to sustain the world population, and agricultural equipment plays a vital role in boosting productivity to meet these needs.” Brazil’s boom has long been built on the export of minerals and agricultural commodities. Brazil exports minerals, such as tantalum, which is used in cell phones, and raw materials, such as coffee and sugar. Brazil’s economy grew by 7.5 percent as recently as 2010, although recent global economic developments have slowed that growth. Brazil’s gross domestic product grew by 2.7 percent in 2011. Economists are predicting 2012 growth at 3 percent, unimpressive by recent Brazilian standards, but still suggesting a rebound from last year. Brazil is the second-biggest soybean exporter and Argentina is the world’s second-biggest corn exporter. (The U.S. is the biggest exporter of each.) Corn and soybean production in Brazil has skyrocketed since the 1990s, when the country’s trade barriers were reduced or eliminated. Colombia has recently emerged as a Latin American investment hot spot. The country has stabilized its security situation and is now seeing record levels of foreign investment and tourism, as well as increasing integration into