Leap Year Delivers Boost to California Exports

California’s exporters turned in another strong performance in February, continuing an unbroken streak of monthly year-over-year increases dating back to November 2009.

The value of goods shipped abroad by California businesses in February reached $12.85 billion, a nominal gain of 9.2 percent over the $11.76 billion in exports reported in February 2011, according to an analysis by Beacon Economics of foreign trade data released last week by the U.S. Commerce Department.

California’s exports of manufactured goods grew by 9.1 percent from $7.53 billion to $8.22 billion, while non-manufactured exports (chiefly raw materials and agricultural products) were up by 3.6 percent from $1.55 billion to $1.61 billion. Re-exports, meanwhile, advanced by 12.9 percent from $2.68 billion to $3.03 billion.

These nominal gains, however, should be adjusted downward because February of this year was one day longer than February of last year.

“With 2012 a leap year, we got the Sadie Hawkins’ Day Bump this February,” said Jock O’Connell, Beacon Economics’ International Trade Adviser. “Discounting for that one extra day, California’s export trade this February was up by a solid but less impressive 5.5 percent over last February.”

On a seasonally-adjusted basis, California’s merchandise export trade in February slipped marginally from January’s level. The 1.3 percent fall-off mirrored a similar month-to-month decline in overall U.S. merchandise exports.

“Overall, the continued growth in California’s manufactured exports is a strong sign for the state’s labor markets,” said Jordan Levine, Beacon Economics’ Director of Economic Research. “Manufacturing has already added back nearly 10,000 jobs since hitting bottom during the recession and today’s figures indicate that the sector will continue to be aided by foreign demand for California-made goods.”

Beacon Economics expects to see California’s exporters continue to post relatively modest year-over-year growth figures over the next several months.

Still, global economic conditions remain unsettled. “The short-term outlook for California exports is somewhat clouded by a number of familiar risks, including the European Union’s inability to turn the corner on its sovereign debt crisis, slower growth rates in most major economies, and the risk of armed conflict in the Persian Gulf,” said O’Connell. “While China’s efforts to re-balance its economy toward a greater reliance on consumer spending should translate into higher demand for imported goods, that is a much longer-term prospect.”

“We are seeing record strength in export demand, and are planning for a more balanced trade mix,” he says. “There is a growing demand for agricultural commodities to be containerized, particularly to China.”