2nd Quarter 2015



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We can hope that Tennessee’s competitiveness and industry mix will enable its exporters to buck at least some of these headwinds.

 

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Trade Report continued

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Neither the gains nor the losses were geographically focused. In fact, Tennessee exports were up across most global regions. Thanks to cotton and aircraft exports, shipments to Southeast Asia were particularly strong, gaining more than $100 million. The Philippines stood out due to a $76 million purchase in the aircraft sector. Korea and Japan both grew about 10 percent. There were smaller gains in Europe, where total state exports rose to $1.1 billion in the EU (up about 4 percent) while holding steady in the U.K. South America also was up a bit (to $516 million) because of strong gains in Chile and Peru. The one region defying the trend was the Middle East, where state exports dropped some 21 percent (a $68 million loss) with a steep drop in car exports and aluminum plating.

Closer to home, Tennessee shipments were up in Mexico and down in Canada. Computers were the major reason for the $60 million gain in Mexico, while continued gains in car exports could not offset losses elsewhere as exports to Canada dipped 4 percent. Those losses were spread over a significant number of goods stretching from DVD/CD sales to mechanical shovels.

So what’s the future? Can the state continue to defy gravity? Maybe not. Tennessee’s July exports were down, though not nearly as much as exports from other states. Nationally, export orders were off 4 percent in July and 7 percent in August. One gloomy sign comes from what were known until recently as the “emerging markets.” Tennessee exports were flat or down to Brazil, Colombia, Turkey, Taiwan, and India, among other such markets. Combined with the gains in the dollar, Europe’s stalled economies, and loss of purchasing power by a number of commodity-based economies (including Canada!), the circumstances are such that it is hard to imagine strong export performances in the coming quarters. However, we can hope that Tennessee’s competitiveness and industry mix will enable its exporters to continue the outperformance of the second quarter and buck at least some of these headwinds.