-June5,2020-
As expected, exports of California-produced merchandise plummeted in April, according to a Beacon Economics’ analysis of the latest U.S. trade statistics released by the U.S. Census Bureau.
California businesses shipped a total of $10.406 billion in merchandise abroad in April, a nominal 24.9% decline from the $13.865 billion in exports recorded in April 2019. Shipments of manufactured products by California firms were down 24.4% to $6.778 billion from the $8.964 billion one year earlier.
Similarly, exports of non-manufactured goods (chiefly the state’s agricultural products and raw materials) were off by 13.2% to $1.485 billion from $1.711 billion. Moreover, as has been the case in the past several months, the state’s export numbers were further pulled down by a 32.8% drop in re-exports, to $2.144 billion from $3.190 billion.
“You simply cannot shut down economies here and abroad without serious repercussions in international trade,” said Beacon Economics’ International Trade Advisor Jock O’Connell. “This was our worst April since the Great Recession.”
Still, California fared better than the nation as a whole. Total U.S. exports for April were off by 29.5% from one year ago, falling to $95.617 billion from $135.539 billion. As a result, California’s share of the nation’s overall merchandise export trade in April was 10.9%, up from 10.3% in April 2019.
Almond prices have been steadily declining since late last year. In this case, the culprit was not China but India, which imported 52% fewer almonds from California this April than last year.
The drop in California’s exports were roughly consistent with the 12.2% decline in containerized maritime exports through the Ports of Los Angeles, Long Beach, and Oakland as well as the 16.7% fall-off in airborne export tonnage from LAX.
Export shipments of almonds, California’s leading agricultural export, were down 5.3% at 103.5 million pounds. Almond prices have been steadily declining since late last year. In this case, the culprit was not China but India, which imported 52% fewer almonds from California this April than last year.
Shipments of Agricultural Products fell by 2.3% to $3.368 billion from $3.448 billion
The state’s exports of manufactured products suffered from widespread factory closures in April, including the Tesla facility in Fremont, which effectively choked off exports of electric automobiles.
“The good news is that most of the high frequency data we have suggests that April was the bottom from an economic activity perspective,” said Christopher Thornberg, Founding Partner of Beacon Economics. “From initial unemployment claims to credit card transactions, May is coming up better than April and, with public health mandates being eased, June should be even better, indicating strong rebound.”
Still, Thornberg warns that international trade will likely take longer to recover than the economy overall as the declines in travel have limited global transactions and that will show up as weaker trade flows later in the year.