Tuesday, July 13, 2010

Beacon: Calif. Export/Import Up in May, Long Term Growth Questioned

California merchandise exports continued a seven-month streak of increases by climbing 25.7 percent in May compared to the same period in 2009, but still fell well short of export levels recorded in May 2008, according to an analysis by Beacon Economics of international trade data released July 13 by the United States Commerce Department.

State exporters shipped $11.9 billion in goods abroad during May, far surpassing the $9.5 billion in exports shipped to foreign markets in May 2009.

“While we should definitely celebrate a $2.4 billion increase in exports over last May, we still have a ways to go before reaching the levels of trade seen before the onset of the global economic and financial crisis,” said Jock O’Connell, International Trade Adviser for Beacon Economics.

O’Connell added that in inflation-adjusted terms, the state’s export trade during May was 7.3 percent below the value of exports reported in May 2008.

Exports of California manufactured products in May were up 25.5 from last May, while shipments of agricultural goods and other non-manufactured products increased 16.5 percent. O’Connell said that re-exports of previously imported items climbed 32.2 percent.

The increases in exports were seen at most of California’s trade gateways, with the Southern California port complex of Long Beach and Los Angeles reporting a 9.4 percent increase in loaded outbound containers over the year-ago period. Loaded outbound box traffic through the Port of Oakland was also up in May, with port officials reporting a 4.5 percent increase over May 2009.

The Commerce Department also reported that California’s merchandise import trade during May increased 29.9 percent over May 2009, climbing to a total reported value of $26.8 billion for the month.

O’Connell warned that despite the increased numbers, the long term outlook for sustained strong growth “is less encouraging now than it had been earlier in the year.”

He pointed to concerns that decisions coming out of the G-20 summit in Toronto seeking to shrink public sector spending will moderate foreign demand for California products through the end of the year.

“The deficit hawks have been gaining the upper-hand in charting fiscal policy in almost every major world economy,” O’Connell said. “As a result, no one is forecasting robust economic growth. Instead, there is a general sense that the tide is going out as we move into a period of slackening demand with the timidity of the private sector now being matched by the austerity of governments worldwide.”