Good news for California’s exporters surfaces…again

“California’s exporters firmly put the Great Recession behind them in January by racking up their fifteen consecutive month of strong, year-over-year growth in trade,” said Jock O’Connell, Beacon’ Economics’ International Trade Adviser.
By Patrick Burnson, Executive Editor
March 21, 2011 - SCMR Editorial

California’s exporters began 2011 by posting their highest export totals ever for the month of January, according to an analysis by Beacon Economics.

“California’s exporters firmly put the Great Recession behind them in January by racking up their fifteen consecutive month of strong, year-over-year growth in trade,” said Jock O’Connell, Beacon’ Economics’ International Trade Adviser.

O’Connell also shared comments with SCMR about the impact from Japans’ calamity:

“As reconstruction efforts unfold, Japanese demand will almost certainly grow for a fairly wide range of California-made goods—from rice and other food products to pharmaceuticals and medical instruments to high-tech electronic machinery and industrial equipment. As a result, I would look for California’s export trade to Japan in 2011 to be at least 15 percent higher than last year’s $12.2 billion total.”

The state’s $ 11.75 billion merchandise export trade in January increased by 14.5 percent over the $10.26 billion in exports recorded last January. Manufactured exports were up by 11.6 percent, while non-manufactured exports (chiefly raw materials and agricultural products) were up by 18.9 percent.

On a somewhat less positive note, the Beacon Economics’ analysis indicates that, while California accounts for 12.4 percent of U.S. residents, it contributed just 10.7 percent of America’s export trade in January and only 9.6 percent of the nation’s manufactured exports. By contrast, California accounted for 13.1 percent of the nation’s merchandise export trade as recently as January 2005. 

“It isn’t clear what is driving these trends as manufacturing in California overall seems to be doing better than the national average,” said Beacon Economics founding partner Christopher Thornberg. “Indeed, manufacturing output in California rose from 10.2 percent of the economy in 2004 to 11.9 percent in 2009,” he said. In the United States overall, output fell from 12.6 percent to 11.3 percent during the same period. 
California’s seaports and airports remain vital gateways for international trade.

In Southern California, the number of loaded outbound containers from the neighboring Ports of Los Angeles and Long Beach was up by 12.6 percent from last January, while Los Angeles International saw an 18.2 percent increase in air freight export tonnage.

In the Bay Area, exported air frieght tonnage through San Francisco International was up by 11.9 percent over last January, while outbound loaded container traffic across the Bay at the Port of Oakland rose by 7.6 percent.

The outlook for exports is for moderate export growth, according to the Beacon analysis.

“Although a generally weaker dollar helps by making California and other U.S. goods cheaper in foreign markets, austerity budgets in Europe coupled with anti-inflationary measures in China and other fast-growing economies may retard demand for imported products,” O’Connell explained.  “Still, we’re expecting exports to continue growing through the year.”

Arguably the biggest wild card right now involves the price of fuel.

“Economies tend to go wobbly and global supply chains start experiencing serious palpitations whenever oil futures float much over the $100 a barrel mark,” O’Connell warned.

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About the Author

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Patrick Burnson
Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

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About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

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