A slower 6.7% gain and worries ahead
by Steven G. Livingston | 1 | 2 | 3
Tennessee exports increased about $500 million last quarter, a 6.7% gain that brought the state's foreign sales to $7.846 billion. The state's numbers lagged a bit behind the U.S. average, with total U.S. exports growing 8.7% for the quarter. Though state exporters continued to make headway, it's clear the global economic slowdown is starting to bite.
Indeed if it were not for the state's NAFTA partners, it would have been a far more difficult quarter. Three-quarters of the state's increases in foreign sales were to Mexico or Canada. Exports to Canada were up $175 million. The majority of the gains were in computers, auto parts, and industrial instruments. Mexico may have been the single best global market for the state. Tennessee shipments south of the border grew by just over $200 million, a 24.8% increase from a year ago. The large increase was concentrated in the automotive sector, including auto parts, ignition equipment, pumps, and engines. The rest of the Americas were at least solid, with exports to Latin America growing from $410 million to $444 million. Chemicals, computer equipment, and aircraft formed the backbone of the gains, while both medical industry and industrial machinery exports suffered modest reverses in this region. Chile was the star Latin American performer, as its purchases of Tennessee goods soared 22%. This brought exports to Chile to just under $100 million for the quarter. That accounted for half the state's export gains to the entire continent. The largest Latin American export market and the only one currently over $100 million, Brazil, saw little change.
In the rest of the world, Australia was the state's best market last quarter. Thanks to strong growth in the computer and aircraft industries, $256 million of Tennessee goods went Down Under, a 39% increase from a year ago. Japan continued to be a very strong market for the state. The medical sector has been the driver of increased sales to Japan for the past several years, and this quarter was no different. That sector now accounts for well over a quarter of all Tennessee exports to Japan. The figures from China were more problematic. Exports to China were up fairly strongly, about 17% for the quarter, but if we subtract increased cotton purchases, the state's remaining exports actually fell modestly by about $9 million for the quarter. Tennessee's global cotton exports declined $77 million for the quarter, so the additional $93 million of cotton purchased by China amounted more to a huge repositioning of the state's cotton market than a vast increase in global cotton sales.