Exports Thrive Amid Recession : Economy: Study suggests that continued growth in trade could lift the county out of downturn. The Free Trade Agreement could accelerate the process.

Exports are one of the brightest spots in Orange County’s financial future and could help lift the region from recession, a study being released today suggests.

One of every 10 jobs in Orange County depends on exports, according to the report from the Institute for Economic and Environmental Studies at Cal State Fullerton. That amounts to 120,000 positions.

And the county’s $6.5 billion in exports for 1991, the latest year for which data is available, accounted for 9.6% of all goods produced here, a higher percentage than for either the state or nation.

“Exports are a crucial part of the Orange County economy,” said Vincent Dropsy, an assistant professor of economics who authored the report. “Exports will help the economy to recover from the recession we are in. It will be the major engine of economic growth.”

That’s because the amount of goods being exported from Orange County has continued to rise, even as overall production and employment have stagnated or declined during the recession. In 1993, the increase in exports is expected to be 8%.

“That is tremendous growth in an economy that is barely moving,” Dropsy said. “This export growth may be the major reason behind Orange County’s economic upturn.”

Also significantly, Dropsy said, Orange County is exporting the kind of high-technology products that create well-paying jobs and for which there will be great demand in the future.

Industrial machinery accounts for about 40% of Orange County’s exports. The next-largest category is surgical and medical instruments, which make up 26% of overseas shipments.

Most Orange County exports go to Europe, but Japan is the single biggest recipient, at 16%, for 1991. North American trading partners bought about a fifth of the county’s exports: Canada, 11%, and Mexico, 10%.

Orange County companies are positioned for significant export growth because of their geographical proximity and existing ties to Mexico and the Pacific Rim, the two regions where the greatest U.S. export potential lies, Dropsy said.

For 1993, Dropsy predicts, Orange County exports to Mexico will increase by 20%. That growth will be partly fueled by the implementation of the North American Free Trade Agreement which will facilitate trade among Mexico, Canada and the United States.

The next-biggest increase, more than 10%, will be with Germany, he said, which is ripe for Orange County exports as it buys capital goods to aid reunification.

Exports on the Rise

This year, Orange County is expected to ship $7.8 billion in goods and services to other countries. That would be up 18.5% from 1991.

How O.C. Compares

In 1991, the latest year for which the federal government has released export figures, Orange County accounted for nearly 2% of the nation’s exports and gross product, and about 10% of California’s. In billions of dollars:

Exports Gross product United States $421.0 $5,839.0 California 63.1 720.7 Orange County 6.5 67.4

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Where O.C. Goods Go

Japan is the largest importer of Orange County goods, receiving nearly 16% of what is shipped from here. Japan: 15.9% Canada: 11.0 Mexico: 9.8 United Kingdom: 7.3 South Korea: 6.4 West Germany: 5.6 Taiwan: 4.5 Singapore: 4.2 *

Top Exports

Last year, exports of durable and non-durable goods combined rose by 6% compared to 1991, and 1993 is expected to show an increase of nearly $700 million over 1992. In millions of dollars:

Durable goods

1992 1993 Machines $2,901.8 $3,228.6 Medical devices 1,852.2 2,044.6 Electronics 959.9 1,063.4 Metal 161.9 183.3 Transportation equipment 102.8 114.4 Lumber 77.3 89.1 Stone, clay, glass 21.4 24.1 Total 6,077.3 6,747.5

Non-durable goods

1992 1993 Rubber 620.1 707.9 Chemicals 108.1 121.4 Food 60.9 67.4 Textiles 40.1 45.3 Paper 30.6 34.5 Total 859.8 976.5 Grand total 6,937.1 7,724.0

Source: Cal State Fullerton’s Institute for Economic and Environmental Studies