4th Quarter 2015



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Tennessee Trade Report

by Steven G. Livingston | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
Across almost every industry, Tennessee export losses in percentage terms were significantly less than for the nation as a whole.

Against a backdrop of a struggling global economy, it likely comes as no surprise that Tennessee exports fell in the fourth quarter. At $8.035 billion, the state exported about $200 million less than in the fourth quarter of 2014, a loss of 2.4 percent. The surprise, really, is that exports held up as well as they did. By comparison, total American exports were off by slightly more than 10 percent, four times Tennessee's percentage drop. This difference is not simply due to what Tennessee sells. Across almost every industry, Tennessee export losses in percentage terms were significantly less than for the nation as a whole.

If there's a single reason why Tennessee buckled but didn't break under all the global bad news, it is the commencement of electric storage battery exports. In the fourth quarter, exports of these batteries rose from virtually zero in 2014 to over $20 million. Foreign shipments of electric battery parts soared to over $80 million, again from virtually zero a year ago. Japan was by far the largest destination for these exports. This surge was enough to outweigh a downturn in car exports themselves, electric or otherwise. Passenger vehicle sales slipped from $608 million in the fourth quarter of 2014 to $566 this past quarter. Most auto parts, however, fared better, breaking roughly even last quarter.

Before we get to the bad news, we might note a few other industries that had quite strong quarters. The medical instrument industry continued its growth, gaining some $50 million in foreign sales. The 8 percent gain in medical industry exports stands in comparison to the overall American loss of about 3 percent in this industry. The majority of these increased exports went to the European Union. Pharmaceutical goods had an even better performace, nearly doubling their exports from $63 million to $125 million. These too, largely went to Europe. Aircraft industry exports were up about 7 percent, to just over $400 million. Here it was a wild ride, as a very large drop in aircraft-related exports in both Mexico and Singapore was more than matched by very large increases to Sweden, Brazil, India, the Czech Republic, and Canada. The cell phone industry, too, had a strong quarter. Thanks mostly to Hong Kong and Southeast Asia, its foreign shipments more than tripled, to $44 million for the quarter.

Losses were centered on exports destined for the emerging markets and China. (Actually a significant loss in car exports to the Middle East suggests we should add oil-producing countries to this list as well). Thus many raw materials, such as iron and steel, wood, and cotton, were all down. The largest hit was the chemical industry, where exports dropped by $100 million last quarter. Particularly hard hit was the coloring pigments and dyes sector, which lost about half of its foreign sales in the fourth quarter. The computer industry also struggled. Laptop exports fell 20 percent, while PC shipments fell by a third.