The greater Houston area has replaced New York City as the largest goods exporting region of the US, official data have shown, thanks to the energy boom that is reshaping the country’s industrial landscape.
Houston’s exports have been powered by the surge in oil and natural gas production from shale reserves, which has created cheap feedstocks for the region’s refineries and petrochemical plants.
The metropolitan area’s exports were worth $110.3bn in 2012, up 5.6 per cent from last year, pushing the New York area into second place after a 2.7 per cent drop to $102.3bn.
The data are for goods exports only, and New York’s service sector would probably make it the largest US area for total exports. Exports from the New York region were hit by tropical storm Sandy last year.
Nevertheless, the rise of Houston, and Texas generally, is a sign of the wider economic benefits created by the boom in oil and gas production.
The largest component of Houston’s exports, accounting for a third of the total at $37bn, is petroleum and coal products, reflecting soaring US sales of products such as diesel, petrol and liquefied petroleum gas, which more than doubled between 2007 and 2012.
US refineries have had a competitive advantage as a result of ample supplies of onshore oil, which depressed domestic crude prices relative to international benchmarks, although that gap has now largely closed.
The second-largest category of Houston’s exports is chemicals, worth $31bn last year, which benefited from cheap natural gas used as a raw material for many commonly used products.
Patrick Jankowski of the Greater Houston Partnership, a business-backed body that seeks to promote trade and investment in the area, said: “We’ve had this incredible natural gas boom going on, and it has made it cheaper to manufacture chemicals in the US than it is in most other places in the world.”
He added that Houston’s 25 mile-long port complex enabled low-cost exports of commodities such as petrochemicals.
Mark Muro of the Brookings Institution, a think-tank, said the city’s “increasingly global ethos” was also a factor in its export success.
“Houston has a big airport serving a lot of international flights, and an increasingly international mentality, built up from its global position in energy and the importance of the port,” he said.
About 28 per cent of Houston’s population was born outside the US, putting it in the top 10 of large US cities for foreign-born residents.
In another sign of the region’s international perspective, direct commercial flights from Houston to Beijing began on Thursday, run by Air China.
As well as fossil fuel products, the Houston region also has significant exports of manufactured goods including machinery and electronics.
Although the latest numbers are for goods exports only, the shift away from New York and towards Houston echoes the US economy’s tilt away from financial services and towards energy.
Since the start of the recession at the end of 2007, the New York area has added a net 75,000 jobs, a 0.9 per cent increase, while Houston has added 195,000, a rise of 7.5 per cent.
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