Make your own free website on Tripod.com
California Exporters Continue Impressive Performance in November 2010 But Are Outpaced By Growth in Overall U.S. Exports

San Rafael, January 13, 2011. California’s exporters racked up another impressive performance in November even while failing to keep pace with growth in the overall U.S. export trade.

The $12.49 billion in goods California businesses shipped abroad in November exceeded the $10.95 billion sent to foreign markets in November 2009 by a healthy 14.1 percent, according to an analysis by Beacon Economics of foreign trade data released this morning by the U.S. Commerce Department.

“The good news is that this was our best November ever in inflation-adjusted terms, and it did mark the thirteenth consecutive month of year-over-year increases in California’s export trade,” said Jock O’Connell, Beacon’s International Trade Adviser.

“The not-so-good news is that California was decisively outpaced by the nation as a whole in overall merchandise export growth in November, 19.4 percent to 14.1 percent,” he added.

In addition, O’Connell pointed out that California’s export trade includes a relatively high percentage of re-exports, items defined as of foreign-origin that were previously imported into the U.S. and which have had no significant value-added prior to being shipped abroad.

The state’s manufactured exports grew by just 6.7 percent over November 2009, while overall U.S. manufactured exports surged by 16.7 percent. Likewise, California’s exports of non-manufactured goods (principally agricultural products) rose by 16.4 percent, while increasing by 22.9 percent nationally. Re-exports of items previously imported leapt by 36.3 percent.

“California’s numerous trading companies do a superb job sourcing goods from around the world and matching them with foreign customers,” O’Connell noted.

California accounted for 11.1 percent of all U.S. merchandise exports in November, but just 9.6 percent of its manufactured exports. The state’s exports of non-manufactured goods did represent 12.4 percent of the nation’s exports of those goods, but fully 19.8 percent of the nation’s shipments of re-exported goods came from California.

As a consequence, O’Connell pointed out, California’s export trade tends to have a less positive impact on the state’s economy and on its propensity for job creation.

“California manufacturers have become exceptionally efficient in increasing output without adding new hires. Our manufacturers also tend to make goods of increasingly higher value. That’s why it is possible for the value of our manufactured exports to rise without there being a commensurate level of job growth,” he explained.

That may help explain why seasonally-adjusted California Employment Development Department labor market reports show manufacturing employment in the state fell by 4,400 jobs between November of 2010 and November 2009, even while 110,900 jobs were being added to the state’s payroll numbers.

“All indications are that the sustained growth in November’s exports was led by airborne shipments of high-value items such as electronics components, medical and scientific instruments, and pharmaceuticals,” O’Connell observed.

Export volumes were up at the state’s three major seaports, with the number of outbound, loaded containers totaling 401,159 TEUs, an increase of14.9 percent over last November. California’s two premier international aviation gateways, Los Angeles International and San Francisco International, posted a 15.4 percent gain in export tonnage over November 2009.

The value of exports through the state’s international airports, regardless of state-of-origin, was up 16.3 percent from last November, while the value of maritime exports via California’s seaports rose by a more robust 21.8 percent.

In Southern California, the number of loaded outbound containers from the neighboring Ports of Los Angeles and Long Beach was up by 18.8 percent from last November, while Los Angeles International saw a 16.2 percent increase in air freight export tonnage.

In the Bay Area, exported air freight tonnage through San Francisco International was up by 12.4 percent from last November, while outbound loaded container traffic across the Bay at the Port of Oakland rose by just 2.8 percent.

"Most Californians don't appreciate that, in terms of dollar value, almost half of this state's export trade moves by air," he pointed out. "Not surprisingly, air transport security is a particularly acute issue for California's exporters."

The outlook for exports going into 2011 is a balance of promise and worry, O’Connell warned.

“Outside of Europe, most of our primary trading partners continue to be major customers for California exporters, while a number of emerging economies in Latin America and Southeast Asia have substantially increased their imports from California," he noted.

O'Connell said the most serious non-economic concern involves the simmering tensions between North and South Korea.

“Coupled with the aggressive posturing we have lately been seeing by the Chinese military, the fall-out from a possibly disruptive succession crisis in Pyongyang this year is by far is the most serious ‘Black Swan’ threatening to disrupt world trade,” he remarked.

South Korea, China and nearby Japan account for almost a quarter of all California exports.

On the import side of the ledger, the U.S. Commerce Department reports that California’s merchandise import trade totaled $29.9 billion in November, an increase of 18.1 percent over last November. California accounted for 17.7 percent of all U.S. merchandise imports in November.

California’s nominal international trade deficit in November 2010 amounted to $17.4 billion.

+++