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California Exports A Bright Spot in Dismal Economy

November 10, 2010—San Raphael, California — While unemployment remained high and foreclosures were on the rise, California’s exporters turned in another strong performance in September.

The $12.32 billion in goods California businesses shipped abroad in September exceeded the $10.352 billion sent to foreign markets in September 2009 by a healthy 19.0%, according to an analysis by Beacon Economics of international trade data released this morning by the U.S. Commerce Department.

September marked the eleventh consecutive month of year-over-year increases in California’s export trade, according to Jock O’Connell, Beacon Economics’ International Trade Adviser. 


“To be sure, September 2009 did not set a very high bar for comparison purposes, but the year-to-year increase was still remarkably robust,” O’Connell said.

California also outpaced the nation as a whole in merchandise export growth in September, 19.0% to 17.9%.

In inflation-adjusted terms, California’s export trade in September almost exactly matched the value of its merchandise exports in September 2008, when international trade began to plummet as the U.S. recession took root worldwide.

The value of the state’s manufactured exports this September was up by 19.0% from last September, while shipments of agricultural goods and other non-manufactured products increased by 10.7%. Re-exports of items previously imported into the state jumped by 24.3%.

California accounted for 11.4% of all U.S. merchandise exports in September.

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

The value of exports through the state’s international airports was up 26.5% from last September, while the value of maritime exports via California’s seaports rose by a more modest 13.7%.

In Southern California, the number of loaded outbound containers from the neighboring Ports of Los Angeles and Long Beach was up by 5.7% from last September, while Los Angeles International saw a 16.3% increase in air freight export tonnage.

In the Bay Area, exported air freight tonnage through San Francisco International was up by 34.0% from last September, while outbound loaded container traffic across the Bay at the Port of Oakland actually fell by 5.1%.

"Most Californians don't appreciate that, in terms of dollar value, about half of this state's export trade moves by air," O'Connell pointed out. "Not surprisingly, terrorist incidents involving air freight pose a particularly acute threat to California's economy."

The outlook for exports going into this winter is mixed, O’Connell warned.

“While the Federal Reserve Bank’s efforts at quantitative easing should push the dollar’s value down to the benefit of California exporters, the current level of acrimony among the G-20 nations is shocking,” he said. “As the G-20 leaders huddle in Korea this week, there appears little room for a consensus to emerge over how the global economy’s chief players will address some extremely vexing economic and trade policy issues.”

On the import side of the ledger, the U.S. Commerce Department reports that California’s merchandise import trade totaled $28.87 billion in September, an increase of 13.2% over last September. California accounted for 17.4 percent of all U.S. merchandise imports in September.

California’s nominal international trade deficit in September amounted to $16.54 billion.


Compiled by Jock O'Connell, International Trade Adviser to Beacon Economics

Detailed data on California's international trade may be found at www.beaaconecon.com. ###