4th Quarter 2008

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Tennessee trade-weighted dollar index


tennessee monthly exports

tennessee's leading trade partners graph

Half of the state's top markets fell in the 4th quarter.


Tennessee International Trade Report

by Steven G. Livingston

Most of Tennessee's foreign markets are faring even worse than the U.S. economy.

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Tennessee exporters are beginning to feel the consequences of the global economic credit crunch. After a solid October, the state's foreign sales fell moderately in November but far more steeply in December. As a result, at $5.587 billion, quarterly exports were down 4.79% from a year ago: the first quarterly drop in exports since the second quarter of 2007. The biggest percentage losses were in the electronics industry and various raw material and intermediate goods industries such as chemicals and primary metal manufacturing. The worst-performing industry in the state was the once-robust waste and scrap metal sector. These results are consistent with what is occurring in other states and indeed around the world. Electronics and computer sales globally have dropped dramatically, and the large decline in manufacturing has been catastrophic for those sectors that supply it with material.

Two sectors continued to shine. The medical industry continued to forge gains, picking up an additional $59 million in exports for the quarter. However, this occurred in October and November; it, too, suffered losses in December. The agricultural sector grew by 48% to $230 million as the state sold significant amounts of soybeans overseas (along with the usual cotton) for the first time in years.

Exports to Canada fell by more than $200 million. To a degree this reflects the continuing problems experienced by the state's automotive sector exporters. But this quarter, their difficulties were joined by problems in the computer and electronics industry. Video games and laptops suffered large declines in sales. So did TVs and other television equipment. These losses more than outweighed the state's strong DVD exports north of the border.

Mexico turned in better numbers, as Tennessee exports grew from $611 million to $659 million in its second-largest market. The gains were almost entirely due to a large increase in the export of motor vehicle parts, though this was to a degree counterbalanced by a big loss in automotive aluminum plating. Mexico was also one of biggest markets for soybeans ($14 million).
Elsewhere, some of the best gains occurred in Japan. Medical instruments and orthopedic exports combined for nearly $100 million in exports and account for most of the $43 million in increased sales to Japan. A third medical sector, pharmaceuticals, was also strong, quintupling its Japanese sales for the quarter. Recent news of the collapse of Japan's own exports (down over 40% thus far in 2009) suggests that next quarter's Tennessee exports to this market are likely to be down very sharply, however. »