San Rafael, December 10, 2010. Even though California’s economy recovery remains a work in progress, Golden State exporters turned in their best performance ever for the month of October.
In inflation-adjusted terms, California’s export trade this October exceeded by 1.1 percent the previous high for that month, achieved in October 2007, according to an analysis by Beacon Economics of foreign trade data released this morning by the U.S. Commerce Department.
“Our export trade is now operating at a pace not seen since the onset of the Great Recession,” said Jock O'Connell, Beacon's International Trade Adviser.
The $12.91 billion in goods California businesses shipped abroad this October also exceeded the $11.08 billion sent to overseas markets in the same month in 2009 by a healthy 16.5 percent margin.
The value of the state’s manufactured exports this October was up by 10.7 percent from last October, while shipments of agricultural goods and other non-manufactured products soared by 34.6 percent. Meanwhile, re-exports of items previously imported into the state jumped by 25.2 percent.
October marked the twelfth consecutive month of year-over-year increases in California’s export trade.
California accounted for 11.0 percent of all U.S. merchandise exports in October.
“All indications are that growth in California’s exports continue to be led by airborne shipments of high-value items such as electronics components, medical and scientific instruments, perishable food items, and pharmaceuticals,” O’Connell observed.
Airborne shipments accounted for 46.9 percent of the state’s $12.91 billion in October merchandise exports, while seaborne trade represented 30.3 percent. Overland trade with Mexico and Canada, California’s two largest trading partners, accounted for the remaining 22.8 percent of state exports.
In Southern California, the number of loaded outbound containers from the neighboring Ports of Los Angeles and Long Beach was up by 11.8 percent from last October, while Los Angeles International saw a 31.4 percent increase in air freight export tonnage.
In the San Francisco Bay Area, exported air freight tonnage through San Francisco International was up by 15.8 percent from last October, while outbound loaded container traffic across the Bay at the Port of Oakland rose by just 0.3 percent.
On the import side of the ledger, the U.S. Commerce Department reports that California’s merchandise import trade totaled $28.85 in October, an increase of 7.2 percent over last October. California accounted for 17.0 percent of all U.S. merchandise imports in October.
California’s nominal international trade deficit in October amounted to $15.94 billion.
Asked about the prospects of seeing strong employment growth resulting from the increase in export activity, O'Connell was not especially sanguine.
“At some point, you would naturally expect higher exports to goose the employment numbers,” he said. “However, California firms have made great strides in efficiency, enabling them to do more with less. Bear in mind that, while manufacturing output in this state increased by about fifty percent in this decade, employment in our manufacturing sector declined by one-third.”
Of the two economic sectors most directly affected by export flows, there are currently about 4,800 fewer workers in manufacturing and 6,800 fewer in transportation and warehousing than there were last October, according to figures from the state’s Employment Development Department.
"Exporters are also likely to be worried about the outlook for California exports going into the new year, " O’Connell observed.
“Austerity measures across Europe, deflation in Japan, unrest in Mexico, and renewed efforts by Chinese authorities to slow down their economy could all put a serious damper on California exports,” he explained
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