4th Quarter 2016



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Tennessee Trade Report

by Steven G. Livingston | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
The quarter capped a very difficult year for state exporters, with 2016 exports down 3.5% for the year.

Tennessee's 2016 fourth quarter exports declined by nearly $130 million from a year earlier. This was especially disappointing because total American exports actually gained a bit for the quarter (albeit not much). The state's 1.6 percent loss in exports placed it 34th among all states in export performance, a far lower ranking than the state usually sees. The quarter capped a very difficult year for state exporters, with 2016 exports down 3.5% for the year (from $32.596 to $31.47 billion).

The overall numbers hid a rather variegated quarter, however. Particularly in Eastern Asia, state exporters performed rather well. The Chinese markets (China, Hong Kong, and Taiwan) combined to produce an almost 15% gain in exports. Hong Kong, in fact, was the state's second-best performing of its larger export markets. This was largely due to a massive increase in cell phone related shipments. Taiwan, meanwhile, was the largest destination of Tennessee's star export for the quarter, silicon. Globally Tennessee's silicon exports have soared from less than $1 million in the fourth quarter of 2015 to $65 million last quarter. Shipments to China itself grew a solid 4% for the quarter to just cross the $500 million barrier.

Exports to Southeast Asia were equally strong. Led by growth in cotton, aircraft, and (again) cell phone parts, the region increased its shipments from Tennessee by 16% for the quarter. South Korea may be under fire by the administration for its trade restrictions, but those restrictions didn't prevent Tennessee exporters from posting a similar 16% gain in this market as well. Silicon and motor vehicles accounted for the lion's share of the increase.

The only sour note in the region was Japan. Tennessee exports there fell by 15%. The biggest problem was a dramatic fall in electric car batteries (from $62 million to $5 million). But even with this large decline, the total East Asian region was up over 6% for the quarter. We might note that an effect of the Japanese decline is that China has surpassed it as the state's largest Asian market.

If East Asia grew, North America at least held steady. Exports to Mexico crept up a bit for the quarter, from $1.17 billion to $1.19 billion. The small gain was enabled by increased shipments of cars and auto parts. Canada similarly inched up a bit, with state exports north of the border growing by $42 million (to $2.175 billion). Automobiles and computers accounted for much of the gain in Canada. Their growth was enough to overcome significant falls in aircraft, engine, and cell phone shipments. The latter appears to indicate a supply chain shift from Canada to East Asia. In total, exports to our NAFTA neighbors were up about 2% for the quarter.