Welcome to the California Trade Report, Beacon Economics’ monthly analysis of California’s international trade activity. This report analyzes data released by the U.S. Census Bureau’s Foreign Trade Division and pinpoints important trends in the state’s import/export industry, identifying potential effects on the state’s economy. The report is only a sampling of the kind of economic research and data analysis available from Beacon Economics.
July 3, 2014 - California’s exporters turned in another exceptionally strong showing in May, according to Beacon Economics' analysis of foreign trade data released this morning by the U.S. Commerce Department.
For the month of May, the state's merchandise export trade totaled $14.23 billion, up 7.4% over the $13.25 billion in exports recorded in May 2013.
The state’s exports of manufactured goods jumped by 7.5% in May, increasing to $9.20 billion from $8.56 billion in May of last year. Foreign shipments by the state’s aerospace industry sector continued to surge.
"These latest numbers unambiguously underscore the ability of California’s manufacturers and farmers to compete successfully in global markets,” said Jock O’Connell, Beacon Economics’ International Trade Advisor.
Meanwhile, the state's exports of non-manufactured goods (chiefly agricultural produce and raw materials) in May totaled $1.91 billion, up 7.4% from $1.78 billion in May 2013. Re-exports also grew by 7.4% to $3.12 billion from $2.91 billion.
For the first five months of this year, California’s merchandise export trade was up 7.1% over the same period last year, while overall U.S. exports edged ahead by just under 3.0%.
A Closer Look At The Numbers
As always, Beacon Economics cautions against reading too much into month-to-month fluctuations in state export statistics, especially when focusing on specific commodities or destinations. Significant variations may occur as the result of unusual developments or exceptional one-off trades and may not be indicative of underlying trends. For that reason, Beacon Economics compares the latest three months for which data are available (i.e., March–May) with the corresponding period a year earlier.
California's merchandise exports during the latest March–May period totaled $43.75 billion, a nominal increase of 8.1% over the same period one year earlier.
The broad category of Computer and Electronics Products remains by far the single largest category of California exports, accounting for nearly one-quarter of the state’s merchandise export trade. In the most recent three-month period, exports of Computer and Electronics Products totaled $10.36 billion, up 1.6% from the same period one year earlier.
Exports of Transportation Equipment meanwhile increased by 15.1% to $4.60 billion, largely powered by a shipments of aerospace equipment to Qatar, Japan, and Taiwan.
Sizable gains were also recorded in the latest three-month period for agricultural produce, up 7.2% to $3.28 billion, and processed food products, up 12.6% to $2.91 billion. Exports of petroleum products continued to rise sharply, soaring by 80.9% to $2.06 billion.
Mexico remained California's single largest export market during the latest three-month period, with the value of exports edging up by 2.7% to $6.17 billion. Exports to Canada dipped by 0.8% to $4.44 billion, while shipments to China rose by 3.2% to $4.16 billion. Japan (up 0.8% to $3.18 billion) and the Republic of Korea (up 8.4% to $2.30 billion) rounded out California's ‘Top Five’ export destinations in the latest three-month period.
Regionally, California's exports to the Asia Pacific region (including Australia and New Zealand) crept up by 3.7% to $16.63 billion. Exports to the European Union rose by 11.4% to $7.78 billion as shipments of California fruits and tree nuts jumped by 39.5%. California exports to Latin America and the Caribbean (excluding Mexico) vaulted by 43.9% to $2.92 billion, powered by a tripling of refined petroleum exports to Chile, Ecuador, El Salvador, and Guatemala. California's export trade with sub-Saharan Africa totaled a comparatively negligible $219 million in the latest three-month period.
California accounted for 10.6% of total U.S. merchandise exports over the past three months.
By mode of transportation, 43.6% of California’s $43.75 billion merchandise export trade in the most recent three-month period was shipped by air, with Los Angeles International and San Francisco International Airports accounting for the vast majority of the state’s airborne trade.
Seaports handled 34.2% of the state’s export trade, while the remaining 22.2% of goods traveled overland by truck or rail to Canada and Mexico.
California Exports: The Near Term Outlook
Beacon Economics expects California’s export trade to continue growing at a healthy pace over the next several months.
"Despite ongoing challenges affecting international commerce and the global economy, evidence suggests that the world is poised for growth in 2014 and 2015," said Beacon Economics' Director of Economic Research Jordan Levine. "Even European nations that have struggled to emerge from the global economic meltdown are forecasted to begin seeing positive growth over the next year. As such, the outlook for California-made exports remains positive."
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