July 12, 2011—SAN RAFAEL, CALIFORNIA—In the midst of gathering fears that America's economic recovery may be sputtering, California exporters posted their 19th consecutive month of healthy year-over gains in May.
Cross-border shipments for the month totaled $13.20 billion, a gain of 10.5% over the $11.95 billion reported in May of last year, according to an analysis by Beacon Economics of foreign trade data released this morning by the U.S. Commerce Department.
The state’s manufactured export trade was up by 6.1%, while non-manufactured exports (chiefly raw materials and agricultural products) soared by 24.2%. Re-exports, meanwhile, jumped by 17.2%.
“Adjusting for inflation, California’s export trade is as robust as it was prior to the recession,” said Jock O’Connell, Beacon Economics’ International Trade Adviser.
Export activity is important to both the U.S. and California recovery. "We opened up a huge deficit in the boom years," said Beacon Economics Founding Partner Christopher Thornberg. "To get back on solid footing, exports need to continue to rise."
The Beacon Economics analysis forecasts sustained growth in California’s export trade, especially in the second half of the year when the pace of foreign trade normally picks up.
"With the dollar as cheap as it is, California as well as other U.S. goods are selling at bargain prices on the world market," O'Connell noted.
He also added that an apparent reprieve from steadily rising oil prices should help exporters by keeping transportation costs in check at least through the summer.
Even as most of the state's chief trading partners are taking steps to battle inflation or curtail budget deficits, Beacon Economics forecasts that those economies will continue to grow and draw in imports from California.
On the import side of the ledger, the value of foreign shipments entering the U.S. via California's airports, seaports, and border crossings rose by 14.7% in May over the same month last year.
As the nation’s primary gateway to the Pacific Rim, California derives ample economic benefits from the import trade. “As much as we might like to reduce our dependence on imported goods, it’s worth emphasizing that moving imported goods to markets throughout the nation represents a vital source of jobs -- many of them well-paying -- in a state where unemployment rates remain perilously high,” O'Connell said.