December 9, 2011 - LOS ANGLES, CALIFORNIA - California's export trade fell prey to sluggish overseas demand in October but still managed to record a 24th straight month of overall growth.
The value of merchandise California businesses shipped abroad in October totaled $13.81 billion, a nominal gain of 7% over the $12.91 billion reported last October, according to an analysis by Beacon Economics of foreign trade data released this morning by the U.S. Commerce Department.
However, exports of the state's manufactured goods rose by just 3.1% from last October to $8.57 billion, while non-manufactured exports (chiefly farm produce and raw materials) edged up by a mere 0.5% to $1.85 billion. By contrast, re-exports jumped 23.3% to $3.39 billion.
"As we have been noting for the last few months now, the pace of growth in California's export trade has slowed," said Jock O'Connell, Beacon Economics' International Trade Adviser. "Were it not for those California firms specializing in re-exporting previously imported goods, our outbound trade would have been stagnant in inflation-adjusted terms."
California's re-export trade is largely composed of foreign products bound for Canada and Mexico that are shipped through the state's ports as well as the trafficking of California dealers in precious metals and gems mined elsewhere in the world.
Beacon Economics forecasts continued slow growth in California's export trade through the winter months as the state's major trading partners weather mild economic slowdowns.
Looking ahead, Beacon Economics Founding Partner Christopher Thornberg says there is hope on the horizon. “Growth in Asian and South American nations continues to be robust, and the continued decline of the dollar makes U.S. products that much more competitive in these markets,” he said.
Thornberg noted that as long as Europe makes continued efforts to stem their sovereign debt issues, export growth should pick up speed in 2012.