Welcome to the California Trade Report, Beacon Economics’ monthly analysis of California’s international trade activity. This report analyzes data released by the U.S. Census Bureau’s Foreign Trade Division and pinpoints important trends in the state’s import/export industry, identifying potential effects on the state’s economy. The report is only a sampling of the kind of economic research and data analysis available from Beacon Economics.
A Big Month For California Exporters
January 7, 2014 – California’s exporters turned in a particularly exuberant performance in November, according to Beacon Economics’ analysis of foreign trade data released this morning by the U.S. Commerce Department.
For the month of November, the state’s merchandise export trade totaled $15.22 billion, a nominal 14.2% increase over the $13.33 billion in exports recorded in November 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 $1.38 billion jump in manufactured exports, which rose by 16.8% to $9.63 billion from $8.25 billion in November 2012.
Meanwhile, the state’s exports of non-manufactured goods (chiefly agricultural produce and raw materials) totaled $2.45 billion, up $489.7 million or 25% from $1.96 billion in November 2012. Re-exports were comparatively unchanged, from $3.12 billion in November 2012 to $3.14 billion this past November, an increase of just 0.6%.
California’s year-to-date $153.53 billion merchandise export trade for 2013 is running handily ahead of the $148.34 billion recorded in 2012. “After a sputtering start to the year, California’s exporters are finishing 2013 with a remarkably strong surge,” said Jock O’Connell, Beacon Economics’ International Trade Adviser. “I’d have said they were going like gangbusters, except that no one recalls that expression.”
The uptick in manufactured exports is also helping to bolster California’s overall economy. “After a slow start relative to the rest of the nation, California stepped up and added 4,300 new manufacturing positions over the past year,” said Jordan Levine, Beacon Economics’ Director of Economic Research. “It’s a positive sign after several decades of decline associated with the loss of much of our aerospace industry in the 1990s and the technological change that has accompanied the computer age.”
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., September-November) for which data are available with the corresponding period in the previous year.
California’s merchandise exports during the September-November period of 2013 totaled $44.35 billion, a nominal increase of 10.7% over the same period in 2012.
Computer and Electronics Products remains the single largest category of California exports, accounting for $11.01 billion in shipments in the latest three-month period. However, growth in this category was comparatively lackluster at 1.5% growth over the same period a year earlier.
Exports of Transportation Equipment meanwhile increased by 12.8% to $4.80 billion, largely powered by a resurgence of exports from the civilian aerospace sector.
Other sizable gains were recorded in the latest three-month period for farm produce, up 18.1% to $4.50 billion, and processed food products, up 17.8% to $2.71 billion. Similarly, exports of petroleum products rose 21.2% to $1.76 billion.
Mexico remained California’s single largest export market during the latest three-month period, with the value of exports edging up by 5.0% to $6.25 billion. Exports to Canada were up 12.2% to $5.21 billion, while shipments to China surged by 19.9% to $4.08 billion. Japan (up 5.2% to $3.34 billion) and Hong Kong (up 10.5% to $2.32 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 13.7% to $17.49 billion. And despite Europe’s prolonged affinity for austerity, exports to the European Union nonetheless rose by 9.6% to $7.35 billion. California exports to Latin America and the Caribbean (excluding Mexico) increased by 5.3% to $2.53 billion, while exports to India rose 15.5% to $1.06 billion. California’s export trade with sub-Saharan Africa was comparatively negligible $207.6 million over the past three months.
California currently accounts for 10.9% of total U.S. merchandise exports. Not surprisingly, its share of U.S. exports to markets in the Asia Pacific region is larger (16.8%) than that of any other state.
Seaports are popularly regarded as the state’s principal international trade gateways. However, on a dollar-value basis, more of California’s merchandise export trade in the latest three quarters went by air (45.1%) than by sea (32.1%). Another 22.8% of the state’s exports of goods travels overland by truck or rail to Canada and Mexico.
Beacon Economics’ outlook for the winter months remains upbeat. “The resourcefulness and performance of California exporters lead us to stand a bit against the tide of many major forecasting organizations who have been cautioning about the effects of slowing global economic growth,” O’Connell said.