4th Quarter 2016



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While overall the numbers were mediocre at best, the state's performance varied substantially by region.

 

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Trade Report continued

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If East Asia performed quite well and NAFTA also posted positive numbers, we can probably guess that in much of the rest of the world things were rather bleak. In the Eurozone, Tennessee exports were off a bit. A sharp drop in medicaments, combined with declines in the medical instrument and computer sectors, shaved about $14 million from quarterly state exports, a 1% loss. In the U.K., though, exports were off a lot. They dropped by more than $50 million, a 17% loss, in spite of a $28 million increase in the aircraft sector. Once again, electric car batteries headed the losses. (Nissan has a U.K. plant.) The other large decline, surprisingly, was in whiskey, which lost almost two-thirds of its sales to Britain last quarter.

Exports to Sub-Saharan Africa and to the Middle East were both off, while the Australian market proved one of the state's worst. Exports dropped more than $50 million to Australia, almost a quarter of the state's sales in the country.

The most difficult region of the world for Tennessee, however, was South America. With fourth-quarter foreign shipments declining from $449 million to $361 million, state exporters suffered a loss of more than $100 million. The large majority of these losses were in Brazil and Chile, the state's two largest markets on the continent. The automotive and the medical sectors both had very tough quarters in this region.

It was a bit of an odd quarter because, as we have seen, while overall the numbers were mediocre at best, the state's performance varied substantially by region. Worldwide, the medical industry had a weak quarter, as did the aircraft, artificial filament tow, and auto parts sectors. On the other hand, most chemical sectors, cotton, the cell phone industry, and especially the car and SUV industry performed rather well.

It might be foolhardy to predict a sudden turnaround in the state's recent export slowdown. But last quarter's loss occurred in October. By December, the 2016 trade numbers had caught up to a year earlier, and in both January and February 2017 exports ran ahead of 2016. So there is at least some evidence that more optimism is warranted for the months ahead.