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Fall 1996 - Volume 2, No. 2

Tennessee International Trade Report
2nd Quarter 1996

Second quarter state exports fell 3.43 percent from a year ago. At $2.251 billion, foreign sales were also down about $52 million from the first quarter of this year. This is mostly explained by a significant decline in Tennessee chemical exports. Traditionally one of the state's two largest export sectors, chemical sales were off $80 million from 1995, accounting for virtually all of the state's decline this quarter. Tennessee was not unique in this respect. Texas suffered an even more dramatic loss in chemical industry sales. This more than erased continued healthy showings by the state's other large export sectors. The transportation sector and the manufacturers of scientific, medical, and industrial instruments, in particular, posted large gains. Indeed, the transportation sector has by now clearly established itself as far and away Tennessee's major source of exports. It was also a good quarter for the state's mining industries, which together made double-digit export gains. The apparel industry, which has suffered major export reverses in other states, also turned in a healthy quarter; its sales increased by roughly a fourth.

"Emerging markets" were not kind to Tennessee exports during the second quarter. East Asia saw some major reverses in the state's fortunes. China, where sales were off 56.6 percent, was the largest problem, but almost all the state's East and Southeast Asian markets were off. The Indian subcontinent was a disaster; exports to Bangladesh and Pakistan each fell over 90 percent, making them two of the state's five worst performing second quarter markets, while India, down nearly 54 percent, was number six. It seems clear the state has not been able to hang on to 1995's large increase in exports to that part of the world. Unfortunately, exports elsewhere could not pick up the slack. Though Japan was a terrific market, with exports there rising almost 22 percent, sales to Mexico and Canada were basically flat, while only modest gains were made in exports to the European Union (about $800,000) and South America (some $1,000,000). There were bright spots, however. Sales to Russia grew dramatically (279 percent), and two of the largest African markets, Nigeria and South Africa, also posted big increases in Tennessee sales.

The third quarter seems to be off to a good start, with July exports up a little over 5 percent from a year ago.

Tennessee's Largest Export Sectors, 2nd Quarter 1996

Tennessee's Leading Trade Partners

Tennessee's Exports of Food and Food Products, 2nd Quarter 1996
(Producers of food products turned in the best 2nd quarter
growth performance among the state's large export sectors)

Tennessee's Exports to Russia, 2nd Quarter 1996

Largest Growth and Decline in Exports by Industry, 2nd Quarter 1996

Fast Changing Export Destinations, 2nd Quarter 1996
Among countries averaging more than $2 million in sales per quarter.

Tennessee Monthly Exports
(Seasonally adjusted, expressed in 1993 dollars)

Exports in $Millions                Nominal Growth Rate (%)


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