A decade ago, Auburn Systems LLC’s trade with Asian countries barely registered a blip on its ledger books, accounting for less than 1 percent of sales. But today, Asia accounts for 11 percent of the company’s business, and the Danvers company, which makes dust monitors for factories, expects that share to reach 30 to 40 percent within five years.
“In Asia, there’s just so much manufacturing going on now,” said Justin Dechene, vice president of strategy at Auburn. “So that’s where we’re growing.”
Auburn Systems’ increase in Asian sales reflects the shift in trading patterns as Massachusetts companies have diversified their international business to rely less heavily on Europe and Canada. Last year, Asia surpassed Europe as the state’s largest overseas market, accounting for $9.7 billion or 36 percent of the state’s merchandise exports, compared to $9.5 billion or 35 percent for Europe, according to WiserTrade.org, a nonprofit research site that tracks trade.
The trend has been 25 years in the making, accelerating in recent years as emerging economies in Asia, notably China, grew at fast clips while many European nations remained mired in recession or near recession following the global financial crisis of 2008.
“The growth in Asia has been simply spectacular,” said Chris Probyn, chief economist at State Street Global Advisors, a unit of Boston’s State Street Corp. “So it’s not surprising to see a shift in our trade.”
These fast-growing economies increasingly demand many of the sophisticated, high-end products made in Massachusetts, such as Auburn Systems’ monitoring devices that detect potentially damaging particulates in manufacturing plants.
Other major Massachusetts exports include pharmaceutical products, medical devices, computer software and hardware, manufacturing equipment, chemical products, and a slew of electronic devices.
In 1988, only two Asian markets, Japan and Taiwan, ranked among the state’s top 10 trading partners. Last year, four cracked the list, led by China, which was the state’s second-largest foreign market, behind Canada. Hong Kong, Japan, and South Korea followed; Taiwan ranked 11th.
But it’s not just these traditional Asian powerhouses that are providing growing markets for Massachusetts products. Massachusetts exports to Vietnam and India, for example, have more than tripled in the past decade, compared to the state’s overall export growth of 44 percent during that period.
“We have a much more balanced portfolio of trade partners than we used to have — and that’s good,” said Andre Mayer, a senior adviser at Associated Industries of Massachusetts, a statewide business group. “Whenever Europe suffered an economic [slowdown] it would really hurt our exports. Now we have more diversity.”
European markets, of course, are still important to Massachusetts companies. Eight of the state’s top 20 export markets remain in Europe, with Germany and the United Kingdom leading the pack, said Paula Murphy, director of the Massachusetts Export Center, a state and federally funded agency that helps companies export products.
“To a degree, geography still makes a big difference to our exports,” Murphy said, “and Europe is simply closer to us than Asia.”
But modern transportation is closing the gap. Over the past two years, Logan International Airport has launched nonstop flights to Beijing and Tokyo, as well as nonstop service to Turkey and the United Arab Emirates, both considered gateways to the Asian continent.
Meanwhile, Panama is expanding the 100-year-old Panama Canal to handle today’s larger container ships, a move that trade specialists say will increase trade between Asia and the Eastern United States.
In response, the Massachusetts Port Authority is planning a $300 million dredging of Boston Harbor so that its Conley Terminal can accommodate larger container ships, mostly coming from Asia.
Spire Corp., a Bedford maker of equipment for solar panel and solar cell manufacturers, exports many of its products through the ports in Boston and New York. And an increasing portion of those exports are headed to Asia, said Ed Hurley, Spire’s vice president of sales.
The Asian market now accounts for about 60 percent of all Spire’s equipment sales, up from less than 5 percent a decade ago, Hurley said.
Much of that growth has been driven by China, which has become one of the world’s leading manufacturers of solar panels. In addition, Spire builds and equips solar panel and solar cell factories for manufacturers in India, Vietnam, and other nations.
“A lot of our focus used to be in Europe,” said Rodger LaFavre, the chief executive at Spire. “But we’ve been diversifying our markets. International trade has really changed for us, particularly in Asia and China.”