-May 10,2019-
California’s California’s merchandise export trade continued to trend lower in March for the second straight month, according to Beacon Economics ‘analysis of the latest U.S. trade statistics released this morning by the U.S. Census Bureau.
Foreign shipments by California businesses totaled $15.55 billion for the month, a nominal 2.6% decline from the $15.96 billion recorded in March 2018.
Exports of manufactured goods, totaling $10.05 billion, fell 2.1% from the $10.27 billion recorded in the same month last year. Shipments abroad of non-manufactured goods (chiefly agricultural products and raw materials) fell by 6.2% to $1.98 billion from $2.11 billion as higher tariffs abroad continued to have a deleterious impact on California’s food exports. The value of re-exported goods slipped by 2.0% to $3.51 billion from $3.58 billion.
“It’s worth recalling that California’s export growth had been particularly robust through the first quarter of last year, before the rounds of higher U.S. tariffs were implemented and then followed by retaliatory tariffs by major trading partners,” said Jock O’Connell, Beacon Economics’ International Trade Advisor. According to O’Connell, however, more than tariffs are to blame. “To explain the recent decline in California exports, you’d have to round up a fairly comprehensive bunch of suspects: a stronger dollar, lower prices of some export commodities, a general slowdown in global economic growth, and even nastier than normal traffic congestion at U.S.-Mexico border crossings.”
The March decline in the dollar value of the state’s export trade is consistent with data on the physical flow of exports through California’s primary 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 2.5% from one year earlier, while airborne export tonnage from LAX was down by 6.0%.
The strengthening U.S. dollar continued to dampen overseas demand for California goods. The Wall Street Journal Currency Index shows the greenback’s value relative to a basket of other major currencies was up 6.8% in March from the same point one year ago. California accounted for 10.5% of the nation’s overall merchandise export trade in March, down from 11.4% one year earlier.
On the plus side, the state’s exports of Transportation Equipment (automobiles, trucks, trains, boats, airplanes, and their respective parts) jumped by 22.1% to $5.71 billion from $4.67 billion, owing to a surge in electric vehicle shipments to China and Europe. Exports of Miscellaneous Manufactured Commodities (a catchall category of merchandise ranging from medical equipment to sporting goods) grew by 7.3% to $4.08 billion from $3.80 billion.
Chemical exports (including pesticides and fertilizers; pharmaceutical products; paints and adhesives; soap and cleaning products; and raw plastics, resins, and rubber) inched up 0.4% to $3.35 billion from $3.33 billion. Exports of Fabricated Metal Products soared by 19.9% to $1.26 billion from $1.05 billion.
On the minus side, exports of Computer & Electronic Products (computers and peripherals; communication, audio, and video equipment; navigational controls; and electro-medical instruments) dropped by 6.9% to $10.13 billion from $10.87 billion, due in part to sharply reduced Chinese purchases of U.S. integrated circuits.
Shipments of Non-Electrical Machinery (machinery for industrial, agricultural and construction uses as well as ventilation, heating, and air conditioning equipment) slumped by 13.6% to $3.90 billion from $4.51 billion.
Exports of agricultural commodities slipped by 0.3% to $3.47 billion from $3.48 billion, as fruits, nuts, wines, and dairy products continued to face higher tariffs abroad. Shipments of Food & Kindred Goods dipped by 1.6% to $2.22 billion from $2.26 billion.