The state’s merchandise export trade in August totaled $14.28 billion, a nominal gain of 8% over the $13.22 billion in exports recorded in August 2012. By comparison, overall U.S. merchandise exports rose by a nominal 3.1% during the same period, while exports from Texas grew by 4.2%.
The uptick in California was led by a surge in manufactured exports, which increased by a nominal 7.4% to $9.35 billion from $8.71 billion last August. “It is worth noting that despite this uptick, manufacturing employment in the state shed 1,200 jobs during the same time,” says Beacon Economics’ Director of Economic Research Jordan Levine. The U.S. Bureau of Economic Analysis reported that manufacturing output in the state grew by over 8% last year, but California has yet to experience the increase in manufacturing jobs seen in other parts of the nation––indicating that California’s growth is more concentrated in the high-productivity, less labor-intensive forms of manufactured products such as aircraft, aerospace parts, and equipment.
Meanwhile, the state’s exports of non-manufactured goods (chiefly agricultural produce and raw materials) rose 17.2% to $1.77 billion from $1.51 billion last year. Re-exports also inched up 5% to $3.16 billion from $3.00 billion.
“Augusts’ numbers were all the more impressive given evidence of a slowdown in economic growth rates abroad,” says Jock O’Connell, Beacon Economics’ International Trade Adviser.
The strong August showing boosted California’s export tally during the year’s first eight months to $109.18 billion, marginally ahead of the $108.27 billion recorded in the same period last year.
In looking at trade in specific goods and with individual countries, Beacon Economics’ analysis cautions against reading too much into month-to-month fluctuations in state export statistics. Significant variations may be attributable to large, one-off trades and may not be indicative of underlying trends. For that reason, Beacon Economics compares the latest three months (June-August) for which data are available with the corresponding period in the previous year.
Those longer term comparisons reveal that exports to Mexico, California’s largest export market, have been off by 9.3%. That shrinkage in shipments to Mexico continues to be associated with very sharp declines in exports of computer equipment that have been evident over much of the past year. Exports to Canada, California’s second largest foreign market, increased by 9.2%, powered largely by surging shipments of aerospace equipment.
California’s merchandise exports to China, the state’s third largest export destination, expanded by 24.9%. Despite a slowing economic growth rate, China is on pace to overtake Canada and become California’s second largest export market later this year. Japan and South Korea retain their standing among the top five foreign customers for California products.
On a regional basis, California’s merchandise exports to Europe increased by 14%, while exports to the Pacific Rim rose by 5.5%. Approximately 85% of California’s exports go to three regions: the North American Free Trade Area (Mexico and Canada), the Asia Pacific region, and Europe. Only about 6% of the state’s export trade involves Central and South America (excluding Mexico). California’s exports to Africa are negligible.
Beacon Economics’ outlook for the remainder of the year leans toward the upbeat. “While economic forecasts for many of California’s major export markets are being ratcheted back, this state’s exporters have shown great resourcefulness in coping with generally adverse market conditions abroad,” says O’Connell.