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Summer 1997 - Volume 3, No. 1

Tennessee International Trade Report
1st Quarter 1997

With Tennessee's foreign sales at $2.374 billion, 1997 opened with both good news and bad news. The state's manufacturers provided the good news. First quarter exports of manufactured goods grew better than ten percent the strongest performance in several quarters. The bad news came from Tennessee farmers. Agricultural crop exports collapsed. Crop sales were off nearly two-thirds from a year ago, a loss of $149 million. The crash in crop exports was dramatic enough to hold overall export growth to a rather modest 3.1 percent for the quarter, well under the U.S. average. This is still an improvement, however, from 1996, when first quarter exports grew less than 1 percent.

The sharp drop in crop sales was the most dramatic change in any of the state's export sectors. But most sectors posted healthy gains for the quarter. The other major exception was the primary metals industry, which continued its recent poor performance with another ten percent decline in exports. The chemicals industry was perhaps the state's star sector. After a slow 1996, chemical (and allied product) exports increased by almost $90 million (24.5 percent). With foreign sales over $453 million, it nearly regained its old position as the state's leading export sector. However the apparel industry can also make a strong a claim to preeminence. Its 32.1 percent growth rate was the highest of any of the state's large export sectors, as it continued to defy predictions it would be hurt by NAFTA. The paper, furniture, and fabricated metal industries were also big gainers. The poor performance of agricultural crops did not extend to livestock sales, incidentally, which posted a gain of 89 percent, one of its best quarters ever.

Geographically, the story was also one of good news, bad news. After a mediocre 1996, state sales to Europe rose some $66 million. Sales to Canada were also strong, increasing $77 million (10.5 percent) from the first quarter of 1996. But China, once again, was another story. There exports fell by almost two-thirds. The resulting $65 million in lost exports virtually wiped out all of the gains made in Europe. Tennessee's second and third largest markets, Mexico and Japan, were also soft, though nothing like China: each dropped about 10 percent. South America continued its schizophrenic ways overall exports were flat, but the region included some of Tennessee's best performing markets (Brazil, Chile) and some of its worst (Venezuela). Outside of East Asia, the toughest region was Africa. Each of the three biggest African markets, Egypt, Nigeria, and South Africa, contracted more than $3 million from 1996.

The most remarkable performance of the quarter, though, was to be found in Central America. Not only were two of the state's five fastest growing export markets in Central America, total exports to the region grew over $20 million: a combined growth rate of 80 percent. Together these countries imported $45 million of goods from Tennessee. If considered as a country, Central America would rank as the twelfth largest Tennessee export market, ahead of Australia, China, or Italy, among others.

The second quarter looks off to a very good start. April 1997 exports were up 10.9 percent, the best monthly performance since June 1995. The woes of crop exporters, however, seem to be continuing.

Tennessee's Largest Export Sectors, 1st Quarter 1997

Tennessee's Leading Trade Partners

Tennessee's Electrical Equipment Exports, 1st Quarter 1997

Tennessee's Exports to Brazil, 1st Quarter 1997

Largest Growth and Decline in Exports by Industry, 1st Quarter 1997

Fast Changing Export Destinations, 1st Quarter 1997
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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