4th Quarter 2014

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The biggest change for the quarter was the slowdown in the automotive sector.

International Trade Report

by Steven G. Livingston | 1 | 2 | 3 | 4 | 5 | 6

State exports were essentially flat for the fourth quarter, growing a miniscule 0.1% to $8.233 billion, pretty much in line with the national experience. American exports grew just under 1% for the quarter. For the past two years, Tennessee exports forged ahead primarily because of robust gains in automotive shipments. This slowed sharply in the third quarter and virtually came to a halt in the fourth. The end of these gains revealed the anemic export growth of most other state (and national) industries. Without doubt the strengthening dollar was a factor. But because the dollar's strength was not yet fully incorporated into fourth-quarter sales and purchase orders, we can't blame all of the slowdown on its rise. The continuing sluggish global economy seems the major problem facing state exporters.

The biggest change for the quarter was the slowdown in the automotive sector. The continuation of the rotation from trucks and large SUVs to smaller vehicles was evident. Exports of the former dropped substantially ($424 million to $301 million), while the latter increased sizably ($258 million to $307 million). This netted to a loss of about $24 million in vehicle shipments. Motor vehicle part exports performed better, gaining $57 million, which led the entire sector to a combined 2% growth for the quarter (to $1.16 billion). While shipments within NAFTA held up (Canada was up over 20%), there were significant declines almost everywhere else. Automotive industry exports fell about $20 million in the E.U., almost $30 to the Middle East, $33 million to Latin America, and $46 million to Australia. The only two non-North American markets that performed well were Korea and Russia. The large recent gain in sales to Korea (from $16 million to $43 million in the third quarter) suggests the positive impact of the 2012 free trade agreement with that country.

It was inevitable the automotive export spurt would slow at some point. From mid-2012, the state's car and SUV exports have risen from $136 million to $675 million. We could not reasonably expect that remarkable performance to continue without cease. For Tennessee exports to continue to grow, other industries, sooner or later, would have to contribute.

Tennessee monthly exports


Tennessee's Monthly Imports