Thursday, December 16, 2010

Beacon Analysis: California Sets Export Record in October

California exporters turned in their best performance ever for the month of October, beating the previous record set back in October 2007 by 1.1 percent, according to a Beacon Economics analysis of the most recently available foreign trade data from the U.S. Commerce Department.

"Our export trade is now operating at a pace not seen since the onset of the Great Recession," said Jock O'Connell, Beacon Economics' International Trade Adviser.

Golden State businesses shipped $12.91 billion in goods abroad in October, surpassing the $11.08 billion in goods exported in the same period last year by a sizable 16.5 percent margin.

Exports from California manufacturers also jumped in October, climbing 10.7 percent compared to October 2009 and shipments of Golden State agricultural goods and other non-manufactured products increased a significant 34.6 percent over the year-ago period. Re-exports of items previously imported into the state, said the Beacon report for October, also jumped by 25.2 percent.

October, in which California accounted for 11 percent of all U.S. merchandise exports, marked 12 straight months year-over-year increases in the state's export trade.

Loaded export container volumes at the Southern California ports of Long Beach and Los Angeles increased by 11.8 percent from October 2009, while Los Angeles International Airport saw a 31.4 percent increase in exported air freight tonnage.

In the Bay Area, loaded export container volumes at the Port of Oakland rose by just 0.3 percent while exported air freight tonnage through San Francisco International jumped up by 15.8 percent from last October.

Beacon also reports that U.S. Commerce Department data shows that California’s merchandise import trade totaled $28.85 billion in October, an increase of 7.2 percent over last October. The Golden State accounted for 17 percent of all U.S. merchandise imports in October.

Beacon's O'Connell was optimistic about strong employment growth resulting from the increase in export activity.

"At some point, you would naturally expect higher exports to goose the employment numbers," said O'Connell. "However, California firms have made great strides in efficiency, enabling them to do more with less. Bear in mind that, while manufacturing output in this state increased by about 50 percent in this decade, employment in our manufacturing sector declined by one-third."

According to Beacon's analysis of California Employment Development Department data, there are currently about 4,800 fewer workers in the manufacturing sector and 6,800 fewer in the transportation and warehousing sector than there were last October.

"Exporters are also likely to be worried about the outlook for California exports going into the New Year," O'Connell observed. "Austerity measures across Europe, an appreciating Japanese currency, unrest in Mexico, and renewed efforts by Chinese authorities to slow down their economy could all put a serious damper on California exports," he explained.