Quinn touts jump in Illinois exports

CHAMPAIGN — When Gov. Pat Quinn faces criticism over Illinois' economy, he argues things are getting better, making one key claim in particular: The state's exports increased by a remarkable 30 percent in 2011.

“We increased our experts in our state, from our businesses both big and small, by 30 percent this past year,” Quinn told reporters last week in Champaign when asked to address complaints about the state's financial climate.

Quinn's boast is accurate, though his figure is rounded up a bit. But every U.S. state increased exports last year, and economists caution that governors shouldn't take full credit for things like export growth, just as they can't take full blame for bad economic climates.

Illinois' export growth increased just under 29 percent last year, according to the U.S. Census Bureau, the authority on American exports. That's almost double the rate of the country as a whole — 15.83 percent — and better than all but a couple of states.

Quinn's staff says his promotion efforts have played a big role. But the truth, economists say, is that dramatic increases probably don't have much to do with Quinn.

“The governor can't create jobs, can't create exports — and the president can't either,” University of Illinois economist Fred Giertz said. “And it's not their fault. It's just not within their power.”

Exports around the country increased last year as the economy started to rebound from recession.

Aside from a 38 percent spike in Utah and Louisiana's 34 percent increase, no state topped Illinois. The Census Bureau put the value of the state's exports at $64.57 billion, up from $50.06 billion. That's a 28.9 percent increase.

Adam Pollet, head of the governor's Office of Trade and Investment, says Quinn started talking up the export increase before full-year figures were available, when partial data showed an increase closer to 30 percent.

Illinois is one of the country's larger exporters, with manufacturers like Caterpillar Inc. and Deere & Co. and grain handlers like Archer Daniels Midland Inc. based here. The state is the No. 2 U.S. grower of corn and soybeans, both key exports.

Quinn's administration has made it easier for those big exporters and smaller counterparts to do business overseas and can take a share of the credit for 2011's performance, Pollet argues.

Quinn is committed to a “very active” set of overseas offices to promote Illinois and its companies, Pollet said. The state spends more than $2 million a year in most years on offices in Belgium, Hong Kong, China, Japan and elsewhere.

The governor has focused on products the state can help, like coal, Pollet said. Illinois' coal and petroleum exports almost tripled in 2011, the Census Bureau says, to about $3 billion. State officials have set up meetings between sellers and prospective buyers in Europe that Pollet says helped drive the increase.

“That's massive growth,” Pollet said.

Quinn also has made a serious business of trade missions, such as a September trip to China, Pollet said. On Friday, Quinn joined others governors in meeting with Chinese Vice President Xi Jinping in California.

Trade missions can be helpful in a small way, according to Creighton University economist Ernest Goss, an expert in the Midwest economy. But last year's export growth in Illinois and elsewhere had little to do with any governor, he argued.

“One of the major factors stimulating exports is a cheap dollar,” he said, explaining that the American currency's relatively low value compared to many foreign currencies makes American products cheaper overseas. “The second factor is the (growing) overall U.S. economy, and that's likewise outside his control.”

Giertz suspects the sharp increase may be an anomaly. He said the state's economy — including its 9.8 December unemployment rate, 1.3 percent higher than the nation as a whole — isn't as healthy as it would be if Illinois were in the midst of sustained export increases like those seen in 2011.

“The state is doing, rather charitably, not that great,” Giertz said. “Last year was a bad year for Illinois.”

The governor in January announced the formation of an export council, which includes state business leaders, to find ways to reach his goal of doubling state exports by 2014. The council includes one of the sharpest critics of Illinois' financial situation, Caterpillar CEO Doug Oberhelman.

Goss said a more realistic goal for Quinn would be doubling exports within seven or eight years, if the state can achieve more realistic annual increases of 10 percent.

REWIND

When Caterpillar bypassed Illinois last week with a new factory it plans to build in Georgia, Quinn brushed off the news, saying Cat needed access to an “ocean port.”

“Last time I checked, there's no oceanfront property in Illinois,” he remarked.

It turns out Caterpillar had something other than Georgia's Atlantic coast in mind. It selected Athens, a town that's more than 200 miles and four hours' drive from the Atlantic.

That's a good deal closer than Illinois. But the state ships a fair share of its products overseas through Chicago's deep-water port.

Caterpillar said its decision was about more than ports. It told Illinois officials the state had essentially no chance because of the company's well-publicized concerns about its home state's fiscal problems, including a multibillion-dollar state budget deficit.