Apr. 21--Wisconsin manufacturers are caught in one of the steepest declines in exports in decades.

Nationwide, exports of U.S. goods and services are expected to fall more than 8% this year -- the biggest annual drop since 1958, according to a new report from Manufacturers Alliance/MAPI, an Arlington, Va., economic research group.

A modest rebound of about 1% is expected in 2010 "as shattered global confidence is rebuilt," the report noted.

"This downturn has been so steep, and is so worldwide, that almost every industry is really getting hit," said Cliff Waldman, Manufacturers Alliance/MAPI economist.

Wisconsin companies, including Harley-Davidson Inc., Brady Corp. and Manitowoc Co., have felt the drop in overseas sales.

Harley said its sales were down 17% in Europe, 26% in Latin America and 30% in Canada during the recent fiscal quarter.

Brady Corp, in its quarter that ended Jan. 31, said sales in Europe were down nearly 29% and fell nearly 34% in Asia.

The company's products range from tiny, non-electronic die-cut parts in mobile phones to industrial labels and signs for factories.

"There's no question that this recession is deeper and longer than any recession I have experienced in my life. And it's global in nature," said Frank Jaehnert, Brady's chief executive officer.

Not that long ago, exports were the bright spot for many manufacturers.

Wisconsin's exports increased 9% to $20.6 billion in 2008, led by sales of products such as industrial machinery and medical instruments.

U.S. exports of goods and services posted an unexpected rebound in February, rising 1.6% to $126.8 billion. Even with the slight increase, however, exports remained nearly 17% below year-ago levels as American manufacturers struggled with slumping demand overseas.

"I think there's going to be a recovery in 2010, but I don't know whether it's going to be moderate, over many years, or a very steep recovery," Jaehnert said.

The current recession is different from previous downturns because it's so global. Usually if one region of the world is struggling, another region is doing better.

"But in this case it's just down worldwide. That certainly is a big difference," Jaehnert said.

The forecast for developing nations is mixed, with China having avoided the feared "hard landing" in its recession, while India's economy has slowed more than expected, according to the Manufacturers Alliance/MAPI report.

Most Western economies are expected to see weak recoveries in gross domestic product and manufacturing output in 2010.

About 25% of U.S. manufactured products are exported.

"We are in serious trouble if we don't get a rebound in exports in 2010," said Dan Meckstroth, economist for Manufacturers Alliance/MAPI.

The strength of the U.S. dollar will play a big role in the recovery here, as a weak dollar fuels exports.

"During the boom times we saw lots of news articles about wealthy Europeans buying up things like New York condos because the dollar was so weak. The same premise played out with manufactured items," said Nicholas Hayes, a partner with Five Twelve Group Ltd., a Milwaukee research firm.

A new climate of austerity has swept over the U.S. and Europe, which could hamper a recovery.

"The whole lifestyle market of having a bigger house and a newer car is on hold for a good period of time. And that explains the export problem," Hayes said.

The recession started later overseas and will probably end there later, according to economists.

"The countries we export to simply haven't seen the bottom of this yet," said Tim Hanley, vice chairman and U.S. process and industrial products sector leader for Deloitte & Touche in Milwaukee.

He added: "I think the outlook for the export market is very difficult into 2010, and the strengthening probably won't occur until sometime in 2011."

-----

To see more of the Milwaukee Journal Sentinel, or to subscribe to the newspaper, go to http://www.jsonline.com.

Copyright (c) 2009, Milwaukee Journal Sentinel

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

NYSE:HOG, NYSE:BRC, NYSE:MTW,

A service of YellowBrix, Inc.