1st Quarter 2013

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Tennessee International Trade Report

The quarter was a decidedly mixed bag.
by Steven G. Livingston | 1 | 2 | 3 | 4 | 5 | 6

Tennessee exporters eked out a 1.32% gain in the first quarter of 2013. This at least surpassed last quarter's decline and, in fact, exceeded national export performance. U.S. exports were up just 0.43% for the quarter. At $7.942 billion in foreign shipments, Tennessee ranked 14th among the American states.
Though the overall value of the state's exports was
stagnant, there was substantial movement in many traded goods. Foreign shipments of cars, for example, were up more than $200 million for the quarter, a two-thirds increase, while auto part exports gained 13% (to $433 million). Sales of orthopedics (up 39%, to $273 million) also increased substantially. Goods as varied as cellulose, cell phone parts, pharmaceuticals, solar cells, and scrap all had good quarters.

Of course, as these gains must indicate, other products had equally difficult quarters. Cotton suffered the largest dollar loss (dropping $129 million, to $208 million for the quarter) though titanium dioxide preparations fared even worse in percentage terms (off $79 million, or 45%). Diesel engines, software and video/computer games, mowers, and trucks also saw substantial export declines. So below a placid exterior, a lot was going on.


tennessee trade-weighted dollar index graph
[larger view]


The fundamental reason for the state's slow export growth is close to home. Tennessee's exports to Canada, its largest market by far, fell by more than $70 million from 2012. Though shipments of cars and auto parts grew vigorously, these gains were outweighed by large losses in computer sales (from $309 to $237 million), computer and video games (off by nearly half), and mowers. Industrial machinery generally did not have a good quarter north of the border. The destination of more than a quarter of all state exports, Tennessee's export numbers are likely to continue to be weak until there's a Canadian turnaround. For the past several quarters, the Canadian slowdown has been mitigated by solid growth in Mexico, but that ended this past quarter. Shipments to Mexico were flat ($1.050 billion in the first quarter of 2012 versus $1.046 billion this past quarter). Most exports to Mexico are automotive related, and declines in auto parts, tires, and car engines accounted for the weak quarter here, although there was also a significant drop in cotton shipments.


tennessee monthly exports graph
[larger view]


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