One near-term cloud on the horizon is that Canada, the U.S.’s biggest customer, is cooling, said Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York.
Dutta projects U.S. exports will expand 2.3% this year after 3.3% gain in 2012. Nonetheless, global demand will firm in the second half of the year, he said.
Canada’s “housing market’s cooling, people are bringing up their savings rate a bit,” Dutta said. In addition, fiscal tightening in Europe and an Asian rebound that has had little impact outside the region are working against an acceleration in demand for U.S. goods, he said.
Diane Swonk remains optimistic even as she agrees that overseas demand is more likely to pick up in the second half of the year. The chief economist for Chicago-based Mesirow Financial Inc. forecasts U.S. exports will grow 5.1% this year as China recovers and Europe stabilizes. Sales overseas will accelerate by 8.7% in 2014, she estimates.
As developing nations grow, demand for goods such as automobiles that require time to produce domestically will initially be bought from American companies, Swonk said. “The first wave is importing,” she said.
More exports also may have indirect benefits for the broader recovery, said the Peterson Institute’s Hufbauer.
“Exports are a very high-paying sector of the U.S. economy,” he said. “Jobs are more steady in export-oriented companies, they pay better” and the companies do more research and development.