California Export Trade Dips Again; Current Forecast Not Encouraging For Exporters
June 4, 2013 – LOS ANGELES, CALIFORNIA – California’s merchandise export trade in April dipped slightly from the level recorded in the same month last year, according to an analysis by Beacon Economics of foreign trade data released today by the U.S. Commerce Department.
The state’s merchandise export trade in April 2013 totaled $13.07 billion. While ostensibly higher than the $13.03 billion in exports posted in April 2012, inflation turned a nominal gain into a real decline of 0.9%.
On a nominal basis, exports of manufactured items slipped slightly from $8.49 billion last April to $8.48 billion this April. Exports of non-manufactured goods (chiefly agricultural produce and raw materials) declined from $1.59 billion to $1.52 billion, while re-exports rose from $2.95 billion to $3.08 billion.
Year-to-date, California’s overall export trade is down from $52.91 billion last year to $52.44 billion.
Because data on specific export commodities and their destinations can vary abruptly from month to month for a variety of factors, Beacon Economics compares the latest three months with the corresponding period in the previous year.
That analysis reveals that the chief culprit continues to be an ongoing decline in shipments of components used in the manufacture of personal computers. In the most recent three-month period (February-April 2013), exports of these items were down 23.4% from the same period last year.
“The surging popularity of smartphones and tablets has been dramatically reshaping global supply chains in the electronics components sector,” said Jock O’Connell, Beacon Economcs’ international trade adviser. “This is a trend we have been observing since late last summer, and it has yet to run its course” he added.
Mexico remains California’s top export market, even though shipments to our southern neighbor declined by 18.5% in the last three months. Shipments to Canada, still the second largest destination for California products, rose by 1.8%. Meanwhile, exports to China, the state’s third biggest overseas customer, jumped by 6.4%.
Beacon Economcs’ analysis yielded one finding that might surprise many.
Although Europe’s well-publicized economic and financial travails would suggest otherwise, California’s exports to the Eurozone were up a robust 9.8% in the last three months, while shipments to the overall European Union increased by 8.4%.
By contrast, the state’s exports to the Pacific Rim declined by 0.9%, despite a healthy 6.4% rise in the value of California goods shipped to China.
Beacon Economics’ current outlook for the state’s exporters is not especially encouraging. Both the International Monetary Fund and the Organization for Economic Cooperation and Development have dialed back their expectations of economic growth in most major markets, and there is no compelling reason to question their assessments.