February 10, 2012 - LOS ANGELES, CALIFORNIA - California firms established a new record high for merchandise exports in 2011, edging past the former high-water mark set eleven years earlier during the dot com boom.
Adjusting for inflation, the total value of goods shipped abroad by California companies last year exceeded the 2000 mark by nearly 2%, according to an analysis by Beacon Economics of foreign trade data released this morning by the U.S. Commerce Department.
“Despite a widespread conviction that California has been closed for business, 2011 turned out to be the best year ever for California’s export trade,” says Jock O’Connell, Beacon Economics’ International Trade Adviser.
Mexico was California’s leading export market last year, with Canada, China, Japan, and South Korea rounding out the top five destinations for state exports.
Exports were led by shipments of high-technology goods, principally electronics products, industrial machinery, and medical equipment.
California’s $159.35 billion merchandise export trade in 2011 represented a nominal increase of 11.2% over the $143.27 billion reported in the preceding year. Manufactured exports were up 7.3% to $102.11 billion, non-manufactured exports rose 15.9% to $20.21 billion, and re-exports jumped by 20.5% to $37.04 billion.
However, a slowing global economy took a toll on the state’s export trade in December. While California’s exports that month reached $13.54 billion, the nominal increase of 1.5% over the $13.34 billion reported in December 2010 was more than offset by inflation. December's total was also down 4.0% on a seasonally-adjusted basis from the preceding month.
“The probable near-term outlook will be sluggish growth in California's export trade,” O’Connell says. “Nearly all major forecasts, including the most recent updates issued by the International Monetary Fund, have been revising downward their 2012 growth expectations for most major economies - including all of California’s principal trading partners.”
Still, while the slowdown at the end of 2011 is likely related to a decelerating global economy and falling imports from China, Beacon Economics’ Founding Partner Christopher Thornberg says it is important to note that December numbers are always tricky due to variables related to the holidays and end-of-year issues.
“We’re cautious, but not drawing any lines in the sand until we see what January and February have to tell us,” Thornberg says.