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How Did Trade Impact Pennsylvania in 2015?

The United States’ trade relationships have been an increasingly discussed topic during the presidential election, as candidates have been weighing in on trade agreements such as North American Free Trade Agreement (NAFTA) and Trans-Pacific Partnership (TPP). Much of the discussion centers on the fact that the U.S. has a trade deficit, which seemingly puts the country at a disadvantage, but this is oversimplifying a complex issue. To illustrate this, we looked at trade data for Pennsylvania in 2015 to see how imports and exports are an important part of the state’s economy.

Highlights

  • Pennsylvania trades over 1,100 products with over 180 countries
  • Top imports are pharmaceutical and medical products, and even though Pennsylvania maintains a trade deficit in these areas, these trade deficits are clearly supporting the growing health care industry
  • Approximately 17.6% of the workforce is employed in health care and social assistance fields, with expected growth of 19.1% from 2012 to 2022
  • 10 of the top fifty employers in the state are hospitals, health care or pharmaceutical companies

Imports and Exports in Pennsylvania

In 2015, Pennsylvania imported 1,175 products from 185 countries and exported 1,159 products to 210 countries. The total value of the state’s imports and exports were $79.7 billion and $39.4 billion, respectively. Pennsylvania’s gross domestic product (GDP) was $658 billion in 2014, and based on growth projections for 2015, imports and exports as a percentage of GDP were approximately 12% and 6%. This is lower than the U.S. total, which stands at 16.5% for imports and 13.4% for exports.

Many of the top imported and exported products in 2015 were pharmaceutical products and medical equipment. In fact, the top import to Pennsylvania that year was packaged, dosed or measured medicine. Also in the top ten were vaccines, blood and cultures, medical, surgical and dental equipment and other miscellaneous pharmaceuticals.

Top 10 Imports (by dollar amount) to Pennsylvania in 2015

Exports tell a similar story with four of the top ten being related to the medical and pharmaceutical industry: vaccines, blood and cultures, packaged or measured medicine, nucleic acids and salts (such as DNA or RNA), and medical, surgical and dental equipment. With the exception of nucleic acids and salts, Pennsylvania maintains a trade deficit across the medical and pharmaceutical products listed in the top imports and exports.

Top 10 Exports (by dollar amount) from Pennsylvania in 2015

Pharmaceutical Imports and Exports

Some might say that Pennsylvania’s trade deficit for pharmaceutical and medical products puts the state and its inhabitants at a disadvantage, but this doesn't include the fact that the state's health care industry is one of the largest employers in the state and has strong growth projections through 2022. As we will illustrate below, the trade deficits are actually supporting this industry. 

In the table below, we can see that Pennsylvania maintains large trade deficits across five of eight pharmaceutical and medical products, and only maintains net exports for nucleic acid and salts, unmeasured or non-dosed medicine and organ and gland extracts.

ProductImports (in millions)Exports (in millions)Net Export (in millions)
Nucleic acids and salts $68.4 $785.9 $717.5
Medicine (not measured or packaged) $14.4 $28.9 $14.6
Organ/gland extracts $6.6 $16.1 $9.4
Bandages, gauze, etc. $33.0 $5.7 -$27.3
Misc. pharmaceuticals $797.1 $54.4 -$742.7
Medical/dental equipment $1,551.2 $679.8 -$871.4
Vaccines, blood, cultures $2,812.9 $1,505.7 -$1,307.2
Medicine (measured or packaged) $11,039.9 $1,265.8 -$9,774.0

However, if we consider employment and labor data, then the figures above tell a much different story. In 2014, Pennsylvania’s nonfarm workforce was estimated at 5.64 million individuals by the state’s Department of Labor. Of these five million employees, approximately 996,000 or 17.6% worked in health care and social assistance, including hospitals, nursing and residential care facilities and ambulatory health care services. Another 17,700 worked in pharmaceutical and medicine manufacturing.

If we exclude social assistance workers (as the use of pharmaceutical products may not be as prevalent in this industry), there were roughly 600,000 individuals who worked in health care services, meaning that one in every ten employees in Pennsylvania worked in these industries. In addition, the Pennsylvania Department of Labor and Industry estimated growth of 19.1% for health care and social assistance fields from 2012 to 2022. We can also see these numbers reflected in the top 50 employers in the state as of the Q3 2015. Of the top 50 employers, 20% are hospitals, health care or pharmaceutical companies. 

EmployerRank (out of 50)
Children's Hospital of Philadelphia 19
Penn State Milton S. Hershey Medical Center 22
Merck Corp. 24
Allegheny Health 29
Thomas Jefferson University Hospital 32
Pennsylvania CVS 35
Lehigh Valley Hospital Center 36
Bayada Home Health Care 44
Einstein Medical Center 47
St. Luke's Hospital 49

Some of these hospitals are also ranked among the best in the nation for various specialties. For example, the Children’s Hospital of Philadelphia is ranked as the second best children’s hospital nationwide and Thomas Jefferson University Hospital is ranked as the second best hospital for ophthalmology in the nation by U.S. News. Even though Pennsylvania maintains a trade deficit on some pharmaceutical and medical products, these trade deficits are clearly supporting a growing, well-regarded industry in the state. 

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