Sacramento, July 10, 2009 - No Green Shoots on the State Trade Front - Exports Down 25% in May
California's merchandise exports continued a seven month-long plunge in May as enfeebled economic conditions in nearly every one of the state's major trading partners curbed demand for the state's goods.
Golden State exports totaled $9.5 billion in May, 25.2 percent below the $12.7 billion in goods the state shipped abroad in May of last year, according to an analysis compiled by the University of California Center Sacramento based on data released this morning by the U.S. Commerce Department.
"The May export numbers offer no encouragement that economic recovery will be a near-term thing," observed Jock O'Connell, the UC Center's international trade and economics adviser. "These were the lowest California export totals for the month of May since 2004."
California's manufactured exports fell by 28.0 percent in May, while agricultural goods and other non-manufactured exports shrunk by 23.3 percent. Re-exports of goods previously imported into the state were off by 15.4 percent.
On a year-to-date basis, California exports are down by 22.6 percent compared to last year when the state's exports totaled $59.9 billion. So far this year, the state's exports have amounted to just $46.4 billion.
The plight of the state's exporters was more than shared by importers. The UC Center Sacramento analysis showed that the value of foreign goods entering the United States through California dropped by 31.7 percent in May.
In downplaying hopes of a resumption of strong growth in the state's export sector, O'Connell pointed to an International Monetary Fund report issued earlier this week. That report forecasts that, of California's leading trading partners, only China is expected to enjoy an expanding economy this year.
By contrast, the IMF predicts that Mexico's economy, California's top export market in 2008, will contract by 7.3% this year. Canada, the state's second largest export destination, will see its economy shrink by 2.3% in 2009. The economies of other top export markets will fare similarly: Japan (-6.0%), South Korea (-3.0%), and the European Union (-4.8%).