2nd Quarter 2009

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Tennessee trade-weighted dollar index


tennessee monthly exports


tennessee's leading trade partners graph

Tennessee International Trade Report

by Steven G. Livingston

It was the worst second-quarter performance in five years.

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Just as everyone expected, this past quarter was very difficult for state exporters. At $4,725,150,346, Tennessee's foreign sales were more than a billion dollars (19.5%) lower than in the second quarter of last year. It was the worst second-quarter performance in five years. The good news, if you wish to call it that, is that the state's losses were more modest than that experienced by the U.S. as a whole (down 27%), let alone by many other nations that saw their exports off by 30% or more.

Losses were nearly worldwide. The biggest dollar declines, of course, were in the NAFTA markets. Canadian purchases were off by over $300 million, almost one-third of the state's total drop in exports. The losses were concentrated in the automotive and computer sectors, but nearly every Tennessee export industry saw a decline in Canadian sales for the quarter. Mexico fared a bit better, though exports still fell by $77 million. Here losses centered in the industrial machinery, auto parts, and aluminum plating (intended for auto production) sectors. State exports to South America fared even more poorly. The 35% drop in exports to South America was the biggest to any continent. Argentine chemical purchases (traditionally the largest Tennessee export to that country) were off precipitously. Sales to Brazil fell by one-third. Chile experienced a loss of the same magnitude. In the latter cases, industrial machinery bore the brunt of the lost sales.

Tennessee exports to Europe fell 19 percent, roughly mirroring the state average. The poorest-performing markets were Spain and Great Britain, both down by more than 30%. The losses to Spain were mostly in the automotive sector, while Britain saw big declines in medical instrument, industrial machinery, and even whiskey sales. Plastics and chemical exports were down significantly across the European continent. One sector able to buck the trend was the aircraft industry, which saw gains in France, Britain, and Italy. The medical instrument industry had by far the strangest quarter. Down across most of Europe, Tennessee's sales of medical instruments and needles to tiny Luxembourg absolutely soared, growing by more than $100 million. This was the most impressive single export performance of the quarter. As a result, the medical instrument industry was actually able to post a 7% gain in European exports for the quarter.

Tennessee exports to the Middle East suffered a loss of more than $100 million, more than half the value of the state's sales to that region in the second quarter of 2008. Almost the entire decline stemmed from a large drop in car sales to Saudi Arabia and the Gulf states. India's reversal wasn't quite that bad, but a huge drop in chemical exports lay behind that country's 25% drop in Tennessee purchases.

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