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.
CALIFORNIA'S SHARE OF U.S. EXPORT TRADE DIPS
In December, the latest data available, California’s share of the nation’s merchandise export trade slipped to 8.9% from 9.0%, where it stood in both November and December 2022, according to Beacon Economics’ analysis of the latest official trade statistics released this morning by the U.S. Census Bureau’s Foreign Trade Division.
California’s export trade in the final month of 2023 had a nominal value of $14.883 billion, down 2.2% from the $15.224 billion recorded in the same month one year earlier. Exports of manufactured goods fell 6.7% to $9.315 billion from $9.979 billion one year earlier. However, the state’s exports of agricultural products and raw materials jumped by 16.0% to $2.069 billion from $1.783 billion. Re-exports increased by 9.6% to $3.500 billion from $3.461 billion. For the entire year, California’s merchandise export trade totaled $178.717 billion, off by 3.7% from the preceding year’s $185.550 billion pace.
Much of the nominal fall-off in exports can be attributed to a decline in export prices. “Nationally, the price index for all U.S. exports decreased by nearly 1% in December and by 3.2% across all of 2023. Exporters of manufactured goods saw even sharper price declines in December,” said Jock O’Connell, Beacon Economics’ International Trade Advisor. “If you got what you paid for, importers of California products were generally getting more than what they had previously paid for.”
Note: The U.S. Commerce Department has been publishing state-of-destination import statistics since 2008. Beacon Economics has long felt that state import data provide a highly misleading indication of the state in which imported goods were ultimately consumed. As a major gateway for the nation’s foreign trade, California has consistently been credited with an out-sized share of U.S. merchandise imports. However, we now believe that the process by which state-of-destination import statistics are compiled has become stable enough to be used to measure relative increases or decreases in the value of imported goods consumed or otherwise used by residents or businesses located in California. We strongly emphasize that we are solely interested in identifying trends. We continue to believe it is not useful to use state export and import statistics to calculate a state trade balance.
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