California Exporters On Hot Streak, Set New Record for 2013

February 6, 2014 - By posting another strong performance in December, California companies set a new record for merchandise exports in 2013, according to a Beacon Economics' analysis of foreign trade data released this morning by the U.S. Commerce Department.

For the year, California’s merchandise export trade was valued at $168.13 billion, up 4% over the 2012 total.

"Even after adjusting for inflation, that tops any pre-recession year," said Jock O'Connell, Beacon Economics’ International Trade Adviser.

For the month of December, the state's merchandise export trade totaled $14.60 billion, a nominal 9.3% increase over the $13.36 billion in exports recorded in December 2012. By contrast, overall U.S. merchandise exports increased by only 0.2% over the same period.

The December gains in California were led by a solid jump in manufactured exports, which rose by 10.6% to $9.58 billion from $8.66 billion in December 2012.

"California has even started to add back manufacturing jobs," said Beacon Economics’ Director of Economic Research Jordan Levine. "Although other parts of the nation saw manufacturing jobs bounce back sooner, California created nearly 1,000 new manufacturing positions in 2013 after nearly two decades of steady declines – demand from the rest of the world has certainly helped to fuel the turnaround."

Meanwhile, the state's exports of non-manufactured goods (chiefly agricultural produce and raw materials) in December totaled $1.92 billion, up 5.1% from $1.89 billion in December 2012. Re-exports increased 10.3% to $3.10 billion from $2.81 billion in December 2012.

The Annual Totals

California's merchandise export trade for all of 2013 totaled $168.13 billion, easily finishing ahead of the $161.70 billion recorded in 2012. By comparison, total U.S. merchandise exports last year rose by 2.1% from 2012.

The state’s exports of manufactured goods amounted to $109.24 billion in 2013, up 4.6% from $104.43 billion the preceding year. Non-manufactured goods were valued at $21.62 billion, up 7.1% from $20.19 billion in 2012, while re-exports amounted to $37.27 billion, a narrow 0.5% increase over $37.08 billion in the previous year.

“For California’s exporters, 2013 was pretty much the story of a second-half rally,” O’Connell said. “In the first six months of the year, exports were actually trailing the 2012 numbers."

A Closer Look at the Numbers

As always, Beacon Economics’ foreign trade analysis cautions against reading too much into month-to-month fluctuations in state export statistics. Significant variations may occur as the result of unusual or exceptional one-off trades and may not be indicative of underlying trends. For that reason, Beacon Economics compares the latest three months (i.e., October-December) for which data are available with the corresponding period in the previous year.

California's merchandise exports during the October-December period of 2013 totaled $45.17 billion, a nominal increase of 11.1% over the last quarter of 2012.

Computer and Electronics Products remains by far the single largest category of California exports, accounting for $11.33 billion in shipments in the latest three-month period. That represented an increase of 4.5% in the final quarter of 2012.

Exports of Transportation Equipment meanwhile increased by 11.6% to $5.04 billion, largely powered by a resurgence of exports from the civilian aerospace sector.

Other sizable gains were recorded in the latest three-month period for farm produce, up 23.6% to $4.50 billion and processed food products, up 20.5% to $2.77 billion. Exports of petroleum products were up sharply, soaring by 46.2% to $2.12 billion.

Mexico remained California's single largest export market during the latest three-month period, with the value of exports edging up by 5.1% to $6.24 billion. Exports to Canada were up 18.2% to $5.32 billion, while shipments to China surged by 29.8% to $4.54 billion. Japan (up 1.4% to $3.26 billion) and the Republic of Korea (up 24.1% to $2.30 billion) rounded out California's ‘Top Five’ export destinations in the latest three-month period.

Regionally, California's exports to the Asia Pacific region (including Australia and New Zealand) grew by 14.3% to $17.77 billion. And despite Europe's prolonged affinity for austerity, exports to the European Union nonetheless rose by 9.2% to $7.41 billion. California exports to Latin America and the Caribbean (excluding Mexico) increased by 13.5% to $2.83 billion. California's export trade with sub-Saharan Africa was comparatively negligible $210.3 million over the latest quarter.

California currently accounts for 11% of total U.S. merchandise exports. Not surprisingly, its share of U.S. exports to markets in the Asia Pacific region is larger (16.4%) than that of any other state.

Seaports are popularly regarded as the state’s principal international trade gateways. However, on a dollar-value basis, more of California’s merchandise export trade in the latest quarter went by air (42.1%) than by sea (35.1%). Another 22.8% of the state’s exports of goods travels overland by truck or rail to Canada and Mexico.

Beacon Economics' outlook going into 2014 remains essentially buoyant. "Although many of the major forecasting institutions have been getting jitterish lately in the face of a slowdown in China’s economy and weaknesses in several developing economies, we continue to have confidence in the resourcefulness of California’s exporters," O'Connell said.

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