2nd Quarter 2009


Graphs link to larger view.


Tennessee trade-weighted dollar index

 

tennessee monthly exports

 

tennessee's leading trade partners graph

(Tennessee International Trade Report)

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In the context of these numbers, East Asia's performance seems almost rosy. Exports to China were off but $14 million (4.3%) thanks to increases in apparel industry imports (man-made fibers and cotton) and medical instruments. (Basic metal industries bore the brunt of the losses in China.) Hong Kong and Taiwan suffered more significant declines, 34% and 30% respectively, but state exporters actually eked out a three million dollar gain (to $273.3 million) in Southeast Asia. The latter was mostly due to a large Boeing-related sale to Singapore that led that nation's total purchases of Tennessee goods to increase by more than $40 million for the quarter. This was more than enough to make up for poor quarters in Indonesia and Malaysia. The South Korean and Japanese markets performed much as did their developed country counterparts in Europe. Japanese purchases were down 14%, while Korean exports dropped about 20%. Most of the losses were in the transportation and plastics sectors.

An odd silver lining in Tennessee's otherwise cloudy quarter was the continent of Africa. Though it's still by far the smallest of the state's markets, Tennessee's exports to Africa gained 13% last quarter. Exports to South Africa accounted for about a third of the increase. But there were also significant gains in exports to Nigeria (aircraft), Morocco (cotton and boats), the Gambia, and Liberia (vegetable oils in both cases).

Very few Tennessee industries avoided the effects of the global crash. With one exception, Tennessee's largest export industries all suffered large reverses. Chemical sales fell more than $185 million to $772 million for the quarter. Transportation sector exports dropped $250 million to $724, in spite of a solid quarter for aircraft sales. Those gains were overwhelmed by large losses in auto and truck exports and an even steeper drop in boat exports. In percentage terms, industrial machinery fared the worst of the major export sectors, falling by more than $200 million. The computer and electronics industry also fared poorly, down almost 17%. DVD, CD and integrated circuit shipments were the most affected. The one exception was the medical industry sector, which continued to forge gains even in this environment. Medical instrument sales were up a bit (from $361 to $370 million), but there were larger percentage gains almost across the board. Sales of medicaments, medical needles, and orthopedic equipment, for example, all posted at least solid gains.

Among smaller export sectors, the only winner was the food industry. Exports of wheat, frozen chicken, and vegetable oils led to a $17 million gain. The paper and primary metal sectors were the most severely hit. Paper exports fell from $173 to $115 million for the quarter, while primary metal shipments were down by more than one-half (to $108 million).

All in all, not the best of times. The question now is when, and how fast, will be the recovery? July exports were roughly flat from a year ago, which at least provides some evidence that the fall has stopped. We now wait for the turnaround.

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