Tuesday, August 16, 2011

Analysis: Good News for California Exporters

Despite the inert and lackluster forward movement of the national economy, exporters in California turned in their 20th consecutive month of vigorous growth in June, according to an analysis by Beacon Economics of foreign trade data released last week by the United States Commerce Department.

California firms moved $13.83 billion in exports shipments during June, a gain of 13 percent over the $12.25 billion reported in June of last year.
"Adjusting for inflation, California’s export trade has firmly returned to its pre-recession peaks," Beacon Economics’ International Trade Adviser Jock O’Connell said.

"More importantly, on a seasonally-adjusted basis, California’s export trade remained on an upward trajectory through the second quarter of 2011, despite the economic and financial tribulations several of our leading trading partners have been enduring," O’Connell said.

According to Beacon's analysis, the importance of this positive news should not be under-estimated: Gearing up to meet export demand is one of the few incentives US corporations have for investing in the domestic economy.

"The primary source of growth for the US over the past year has been through the export sector," Beacon Economics’ Founding Partner Christopher Thornberg said.
"Export trade is key in re-balancing the domestic economy given the massive trade deficit that opened in the middle part of the last decade."

Trade in California traditionally picks up in the second half of the year and Beacon Economics expects continued growth in the state's export trade during this period.
"The upside of a battered dollar is that California products, from farm produce to pharmaceuticals, are at bargain prices in the world market," O’Connell said.
"The recent drop in oil prices doesn't hurt."

However, the analysis pointed out, the picture was not as positive on the import side of the ledger. The number of loaded inbound shipping containers arriving at the state's seaports in June was down by 5.5 percent from June, 2010, while import tonnage through California's airports declined by 11.7 percent.