California Export Market Down, Report Says

California’s merchandise export trade finished 2012 on a weak note, owing largely to a sharp drop in shipments of electronics components to factories in Mexico, according to an analysis of newly released foreign trade data.

According to an analysis by Beacon Economics of foreign trade data released by the US Commerce Department on Feb. 8, California’s merchandise export trade for 2012 fell just short of the mark attained in 2011.

For December, California’s merchandise export trade was valued at $13.36 billion, a decline of 1.3 percent from the $13.53 billion recorded in December 2011. Adjusting for inflation, December exports were down 3.3 percent from the same month one year earlier.

“The December decline in exports was disappointing but not unexpected,” Beacon Economics international trade adviser Jock O’Connell said. “While the economies of several of our principal trading partners had been moving through a sluggish stage, California’s export trade has been severely pummeled by the shrinking worldwide demand for personal computers.”

That analysis reveals that exports to Mexico, California's leading foreign market, fell by 17.2% in the last quarter of 2012.

Significant fourth quarter declines were also observed in California shipments to South Korea (-7.8 percent), China (-6.4 percent), Japan (-3.4 percent) and Canada (-3.3 percent). Gains were recorded in exports to Taiwan (+7.1 percent) and the European Union (+2.6 percent), according to the Commerce Dept. data.

For 2012 as a whole, California merchandise exports totaled $161.7 billion, a gain of just 1.6 percent over 2011’s $159.12 billion.

Report: California Exports Increase, Euro Crisis Could Be Problem

California exports posted a significant 21.8 percent increase in April compared to the same period last year, according to the latest analysis of US Commerce Department data by Beacon Economics.

Beacon reports that $11.26 billion in export goods were shipped abroad by state exporters in April, far exceeding the $9.24 billion the state's exporters sent to foreign markets in April 2009.

April was the sixth consecutive month of year-over-year increases in California 's export trade, said Beacon Economics International Trade Advisor Jock O'Connell.

Manufactured exports also climbed 18.8 percent over April 2009, said Beacon, while shipments of agricultural goods and other non-manufactured products were up by 29.6 percent. Re-exports of items previously imported into the state also rose by 28.1 percent.

However, O'Connell offered a warning on the positive look of the numbers.

"Impressive as these numbers certainly are, it's worth keeping in mind that we are still exporting less in real dollar terms than we were in April 2008," O'Connell said.

Beacon also reported that prospects for continued growth in the state's export trade appear to be mixed.

O'Connell warned that the debt crisis in Europe could pull down worldwide demand for California exports through the rest of 2010.

"Since January 1, the euro has lost between 16 percent and 18 percent of its value against the dollar and most other major currencies," O'Connell said. "So it's not simply that our goods have become more expensive for Europeans to buy, it also means that European goods have become cheaper for importers in countries like Canada, Mexico, Japan, China, and South Korea – which represent California's top five export markets."

O'Connell added that the United States competes intensively with European exports, "and they've just cut their prices."

The Beacon report said that some analysts are predicting that the Euro will fall even further, perhaps reaching $1.10 by this fall – a value not seen since the year the Euro was fist introduced.