Best Performance Of 2013 For State Exporters
December 4, 2013 – California’s exporters turned in their best performance of the year in October, according to a Beacon Economics’ analysis of foreign trade data released this morning by the U.S. Commerce Department.
For the month of October, the state’s merchandise export trade totaled $15.35 billion, a nominal 10.7% increase over the $13.87 billion in exports recorded in October 2012. By comparison, overall U.S. merchandise exports rose by 5.9% over the same period.
The uptick in California was led by a solid $727 million increase in manufactured exports, which rose by 8.16% to $9.66 billion from $8.93 billion last October.
Meanwhile, the state’s exports of non-manufactured goods (chiefly agricultural produce and raw materials) totaled $2.35 billion, up $376 million or 19.0% from $1.98 billion last October. Re-exports were up by $379 million, from $2.96 billion last year to $3.34 billion this year, an increase of 12.8%.
After a sluggish start, California’s year-to-date $138.31 billion merchandise export trade is running slightly ahead of the $135.01 billion recorded in the same period last year.
“With the surge in California’s export trade in recent months, the state’s exporters ought to be feeling a pretty healthy endorphin rush,” said Jock O’Connell, Beacon Economics’ International Trade Adviser.
And the fact that things are picking up a bit shouldn’t be a surprise, said Christopher Thornberg, Founding Partner of Beacon Economics. “Europe saw a modest positive uptick in the 2nd and 3rd quarter of this year, and the rest of the world economy seems to be gaining traction as well,” said Thornberg. “This shouldn’t imply that Europe’s problems are fixed, but at least the drag they were creating on global growth and trade is gone, and clearly this is good news for local exporters.”
Regionally, California’s exports to Pacific Rim markets grew by 7.5% to $16.21 billion. Despite Europe’s embrace of austerity, exports to the European Union rose by 12.3% to $6.88 billion. California exports to Latin America and the Caribbean (excluding Mexico) rose just 2.7% to $2.59 billion, while exports to India jumped 65.5% to $1.67 billion. California’s export trade with sub-Saharan Africa is comparatively negligible at $0.23 billion during the last quarter.
A Closer Look At The Numbers
As always, Beacon Economics’ foreign trade analysis cautions against reading too much into month-to-month fluctuations in state export statistics. Significant variations may occur as the result of unusual or exceptional one-off trades and may not be indicative of underlying trends. For that reason, Beacon Economics compares the latest three months (i.e., August-October) for which data are available with the corresponding period in the previous year.
California’s merchandise exports during the August-October period of 2013 totaled $43.41 billion, an increase of 8.5% over the same period in 2012.
Computer and Electronics Products remains the single largest category of California exports, accounting for $10.77 billion in shipments in the latest three-month period. However, there was absolutely no growth in this category over the same period a year earlier.
Exports of Transportation Equipment meanwhile increased by 19.1% to $4.93 billion, largely powered by a spurt in exports from the aerospace sector.
Other sizable gains were recorded in the latest three-month period for farm produce, up 21.7% to $3.74 billion, and processed food products, up 20.8% to $2.65 billion. Similarly, exports of petroleum products rose 27.8% to $1.71 billion.
Mexico remained California’s single largest export market during the latest three-month period, even though exports were up by just 1.3% to $6.33 billion. Exports to Canada were up 12.9% to $5.11 billion, while shipments to China surged by 21.8% to $5.11 billion. Japan (up 1.3% to $3.19 billion) and Hong Kong (up 2.16% to $2.16 billion) rounded out California’s ‘Top Five’ export destinations in the latest three-month period.
Regionally, California’s exports to the Asia Pacific region (including Australia and New Zealand) grew by 11.6% to $17.04 billion. And despite Europe’s lingering infatuation with austerity, exports to the European Union, while slowing lately, still rose by 8.6% to $7.06 billion. California exports to South America fell by 7.6% to $1.83 billion, while exports to India jumped 36.0% to $1.37 billion. California’s export trade with sub-Saharan Africa is comparatively negligible at $193 million over the past three months.
California currently accounts for 10.6% of total U.S. merchandise exports. Not surprisingly, its share of U.S. exports to markets in the Asia Pacific region is larger (17.2%), while the percentage of U.S. exports to South America originating in California is just 5.8%.
Seaports are often regarded as the state’s principal international trade gateways. However, on a value basis, approximately 45% of California’s merchandise export trade actually goes by air. By contrast, seaports handle about 32% of the state’s exports by value. The balance travels overland to Canada and Mexico.
Beacon Economics’ outlook for the remaining two months of 2013 remains essentially buoyant. “Although almost every major forecasting institution has been ratcheting back their expectations for global economic growth, we continue to place our bets on the resourcefulness of California’s exporters,” O’Connell said.
Beacon Economics is a leading provider of economic and data analysis. Our research informs the financial and economic strategies of major hedge funds, industry, cities and counties, government agencies, and nonprofit organizations.