April 12, 2011—SAN RAFAEL, CALIFORNIA—California exporters recorded their 16th consecutive month of healthy year-over-year gains in February with shipments totaling $11.76 billion, a 13.4% increase over the same month last year,according to an analysis by Beacon Economics of foreign trade data released this morning by the U.S. Commerce Department.
Manufactured exports were up 9.4%, while non-manufactured exports (chiefly raw materials and agricultural products) rose by 10.6%. Re-exports were meanwhile up by 30.8%.
“On an inflation-adjusted basis, California’s export trade this February exactly matched the value of our exports in February 2008, before the global economy began its precipitous slide into an abysmal recession,” said Jock O’Connell, Beacon Economics’ International Trade Adviser.
"Growing exports will continue to be an important part of the recovery in the nation and in California," added Beacon Economics Founding Partner Christopher Thornberg. "The solid employment numbers coming out of San Jose and San Diego can be directly traced to growing technology exports."
Unlike the United States as a whole, which saw merchandise exports decline 2.3% from January to February, California’s exports of goods this February topped the previous month’s total by $17 million.
“Export figures should really be viewed as lagging economic indicators in the sense that cargos departing today are the result of foreign orders for California goods that were placed weeks or even months ago,” O’Connell advised.
“Interpreting February’s numbers does not require a crystal ball but rather a review of news reports from last fall to see what was happening then that might have been informing business expectations about the future,” O'Connell explained.
In the case of the latest figures, O’Connell said that foreign buyers were banking on continued weakness in the U.S. dollar by snapping up a wide range of relatively inexpensive American products from soybeans to aircraft.
"The growth in exports is partly a function of solid growth in foreign nations - particularly developing economies," said Thornberg. "The rapid pace of inflation in developing nations relative to the United States has been putting pressure on the real value of the dollar, which is now 15% cheaper than it was in 2005 relative to a basket of developing nation currencies."
O'Connell disputed the often-cited belief that exports might have been slowed in February by anticipation of the disruptive effects New Year’s holiday celebrations have on economic activity throughout much of Asia.
The Beacon Economics' analysis expects continued moderate growth in exports.
On the plus side for California exporters, the dollar has fallen 6% so far this year against a weighted basket of currencies from America’s major trading partners. Most forecasts call for the dollar to move even lower as the year through this year.
The earthquake and tsunami that devastated northeastern Japan and the subsequent nuclear disaster will roil trade for months but should be offset to some extent by a surge in shipments of relief supplies and reconstruction materials, O’Connell noted.
Arguably the biggest wild card right now involves the price of fuel.