But Ag commodities are up
August 4,2019
California’s merchandise export trade slipped lower in June, according to Beacon Economics’ analysis of the latest U.S. trade statistics released this morning by the U.S. Census Bureau.
Exports by California businesses totaled $13.99 billion for the month, a nominal 9.2% drop from the $15.41 billion recorded in June 2018. This is worse than the national decline of 5%, but according to Christopher Thornberg, Founding Partner of Beacon Economics, “at the national level, one of the few bright spots for U.S. exports has been in the refined oil product category—driven by the shale oil boom. California has not seen a similar increase in oil production, which is driving the gap between the state and national trends.”
Exports of manufactured goods from California, totaling $9.00 billion, were down 6.6% from the $9.64 reported in the same month last year. Shipments abroad of non-manufactured goods (chiefly agricultural products and raw materials) slipped marginally to $1.73 billion from $1.74 billion. The value of re-exported goods meanwhile tumbled by 19.1% to $3.6 billion from $4.03 billion.
“June’s fall-off in the state’s export trade really comes as no surprise given today’s less than optimal climate for world trade,” said Jock O’Connell, Beacon Economics’ International Trade Advisor. But higher tariffs are only part of the story. Weak economic growth abroad, disruptions in high-tech supply chains, a strong dollar, lower prices of some export commodities, late season rains that adversely affected harvest of cherries and other seasonal crops, and traffic congestion at U.S.-Mexico border crossings also played a role in stymieing the state’s exporters.
The decline in the dollar value of California’s export trade was reflected at California’s major international trade gateways. The number of loaded export containers shipped from the state’s three major container ports (the Ports of Los Angeles, Long Beach, and Oakland) dropped by 1.9% from a year earlier, while airborne export tonnage from LAX was down by 10.7%.
Not all commodities suffered, though. June exports of almonds, California’s leading agricultural export, totaled 108.02 million pounds, a 14.3% increase in exports over last June. That was driven in part by a robust 117.5% surge in shipments to China and Hong Kong. (The California Almond Board considers the two a single market.)
California accounted for 10.1% of the nation’s overall merchandise export trade in June, down from 10.6% one year ago. Through the first half of 2019, the state’s $86.80 billion in merchandise export trade was lagging last year’s $89.82 billion first-half total by 3.4%.
On the plus side, the state’s exports of Transportation Equipment (automobiles, trucks, trains, boats, airplanes, and their respective parts) edged up slightly to $5.23 billion from $5.21 billion. Exports of Miscellaneous Manufactured Commodities (a catchall category of merchandise ranging from medical equipment to sporting goods) rose by 7.4% to $4.43 billion from $4.12 billion.