But Troubled European Economies Could Dampen Demand For State's Products
May 12, 2010 SAN RAFAEL, CALIFORNIA California's merchandise export trade continued to claw its way back toward pre-recession levels in March, with the value of outbound shipments showing an impressive 25.7% gain over the same month last year, according to a new analysis by Beacon Economics.
The $12.37 billion in goods shipped abroad this March substantially exceeded the $9.84 billion the state's exporters sent to foreign markets in March 2009, according to Beacon's analysis of international trade data that was released this morning by the U.S. Commerce Department.
March marked the fifth consecutive month of year-over-year increases in California's export trade, said Jock O'Connell, Beacon Economics' International Trade Adviser.
"While March's numbers are certainly comforting, we shouldn't forget that we are still not back to the volumes of trade we were doing before the global financial and economic crisis sent international trade spiraling into an abyss," he observed.
California's exports of manufactured products increased by 21.7% from last March, while shipments of agricultural goods and other non-manufactured products rose by 29.7%. Re-exports of items previously imported into the state jumped by 37.5%.
Looking ahead, Mr. O'Connell said that the sovereign debt crisis that has lately engulfed the European Union could seriously dampen demand for California products for some time to come. "While most of our export trade involves Canada, Mexico, and the Far East, the fallout from what has been happening in Europe has been affecting markets throughout the world," he warned.
"It's not simply that the euro has been losing value against the dollar as the crisis has unfolded over the last several weeks, it's that the steps needed to restore fiscal health to countries like Greece, Spain, Italy and Portugal are apt to retard economic growth throughout the EU and among the EU's global trading partners," Mr. O'Connell said.
He added that concern over the viability of the euro as a reserve currency would probably also cause Chinese authorities to suspend plans to allow their currency to appreciate against the dollar, a step that would have made U.S. goods cheaper for Chinese businesses and consumers.
China has emerged as California's fourth largest export market.
March's rise in the state's export trade was reflected at California's major international trade gateways. The number of loaded shipping containers leaving the Ports of Los Angeles, Long Beach and Oakland were up by 10.1% over last year. Similarly, at Los Angeles International and San Francisco International, the state's two primary international airports, export tonnage in March jumped by 35.8% over last March. California accounted for 11.2% of all U.S. merchandise exports in March.
On the import side of the ledger, the U.S. Commerce Department reports that California's merchandise import trade totaled $24.92 billion in March, an increase of 25.6% over last March ($19.84 billion).
California's international trade deficit in March amounted to $12.55 billion.