4th Quarter 2017



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Tennessee Trade Report

by Steven G. Livingston | 1 | 2 | 3 | 4 |
The fourth quarter's gains ended a good year for state exporters.

Tennessee's exports grew by almost 6 percent this past quarter. That is a gain of $470 million from a year ago. It ended a good year for state exporters. At $33.3 billion, 2017 annual exports gained a similar 6 percent over 2016. That said, the state lagged the national export performance during the fourth quarter. American exports were up 7.8 percent, and 30 other states had higher export growth rates than Tennessee's.

We noted in our third quarter report that the state's export gains were uncomfortably concentrated in one sector, the aircraft industry. That changed in the fourth quarter. Export gains were widely distributed across different industries. There were a few spectacular performers, however. The largest dollar gain among all Tennessee exports was in the cell phone industry. Shipments soared from $194 million in the last quarter of 2016 to $312 million this past quarter. These are mostly going to East Asia (especially Hong Kong) and South America. Next best was earth-moving equipment (bulldozers, mostly), for which exports more than tripled. This gain was almost entirely in Canada. Kraft paper and paperboard exports grew from $68 million to $109 million. Finally, while whiskey exports usually jump in the fourth quarter because it's the holiday season, this season was unusually cheery. Sales rose by nearly a third, to almost $200 million, from a year earlier. Most of this gain was in Europe.

The state's two biggest export sectors, automotive products and medical products, posted solid numbers though nowhere near those above. The auto industry featured two almost perfectly counteracting trends. There was a huge increase in the export of assembled cars and trucks. A large part of this was because of the continued increase in sales of hybrids in China. Among the state's big car markets, only Saudi Arabia was down this quarter. But these gains were almost offset by equally large declines in the shipments of automotive parts. This includes gas engines and aluminum plating (mostly used for stamping body parts). As a result, the entire sector ended by netting around $30 million in increased shipments for the quarter.

The medical sector also made modest gains. Exports of medical instruments were up $17 million, a 2.6 percent increase. Pharmaceutical shipments grew 10 percent, to $129 million. On the other hand, foreign sales of orthopedic products were essentially flat for the quarter. Combined, this sector also saw an export increase of about $30 million.