1st Quarter 2010

(Tennessee International Trade Report)

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In the emerging markets, both Latin America and Southeast Asia produced very good numbers for the quarter. Shipments to Latin America increased by more than 30%, to $450 million. Brazil accounted for about a third of that gain. Computer exports were particularly strong in this area of the world. The ASEAN nations of Southeast Asia collectively purchased some $272 million of Tennessee goods, a 35% increase from the first quarter of 2009. Two-thirds of this gain, though, was accounted for by Singapore alone. The state's single best market for the quarter was the Philippines, where the state's exports soared from $11 to $40 million. Remarkably, this was not because of any big one-time sale, but because of increased shipments of a variety of different goods.

The state also had a strong quarter in Europe, where its exports rose about 15% to $1.1144 billion. Much of this was due to chemical exports, particularly in the cases of Germany and the Netherlands. France and Italy also each increased their purchases of Tennessee goods by about $15 million. Luxembourg continued to be the site of a huge increase in Tennessee medical equipment sales, though as explained in earlier trade reports much of this is just being rerouted from other European states. The one poor European market was that of the United Kingdom, where state exports fell $40 million to $166 million. In large part this was due to a fall in medical instrument shipments along with a drop in civilian aircraft exports.

All in all, the first quarter was good news for just about all of the state's exports industries. It's a remarkable turn around from the gloom and doom of a year ago. Let's just hope we can enjoy it for a while!

The Euro Crisis?

On the horizon, of course, is the potential fallout of the ongoing economic crisis in the euro zone. At the moment, this should not bother Tennessee exports too much. State exports to Greece itself are tiny. The state exported just over $37 million to Greece during all of 2009. Exports are overwhelming in medical instruments, with whiskey running second. No other product is of any significance. It is not surprising that exports were down last quarter, but then they have been falling annually since 2007. Portugal is an even smaller market yet for the state: 2009 exports were just over $20 million. Half of that was in civilian aircraft. Whiskey and rough-cut wood were the only other products with sales more than $1 million for the year. Not unless the crisis reaches Spain, the state's 20th-largest market, would many state exporters begin to feel the pinch. Spain purchased some $200 million of goods in 2009, and unlike two smaller "Club Med" countries, state exports to that country are still growing. But they are highly concentrated. Whiskey and medical instruments account for almost three-quarters of the state's shipments to Spain, although that country has been a relatively big importer of the state's auto parts at times over the years. From these numbers, it appears that the state's main difficulties will not arise from events in these countries. Only if the crisis should spread to Italy or depress overall economic growth in Tennessee's larger European markets will state exporters be heavily affected.

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