3rd Quarter 2012

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tennessee monthly imports graph

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tennessee leading trade partners graph
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Tennessee International Trade Report

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A number of sectors did not fare particularly well, as the state's overall mediocre performance would suggest. These included several industries that have long been important to the state, including cotton, whiskey, and aluminum products. Cotton (and cotton yarn) exports fell to $178 million, suffering losses notably in Mexico, Southeast Asia, and Turkey. The state's whiskey industry has shrugged off economic slowdowns in the past but does not seem to be having the same luck this time around. Whiskey exports fell $22 million (-12.4%) last quarter. Apparently the austerity measures in Europe are clipping whiskey sales, for that is where the losses are concentrated. The state's aluminum industry also did not fare well, with shipments of aluminum plating down 35% (to $62 million) and exports of aluminum waste off 52% (to $11 million). Losses in the former were mostly in Mexico, while decreased sales to China account for the latter.

Significant export losses came from two small sectors. "Special purpose vehicle" exports crashed, falling from $64 million to $2 million for the quarter. These vehicles were going to Afghanistan, giving an idea of their special purpose. Snowplow exports, of all things, had a terrible quarter, with foreign sales melting from $21 million to just $2 million. As perhaps might be expected, Canada is the big market here.

Geographically, the biggest story of the quarter is the slowing of the NAFTA region. For the past several quarters, Tennessee has relied on Mexico and Canada for much of its export growth even as the rest of the world was clearly slowing down. But in the third quarter, state exports to Canada grew just 2.4% while those to Mexico inched up 2.65%. Both these performances fell below the state's overall export growth rate, an unusual occurrence. South America was flat: Tennessee exports eked out a $10 million gain, with Brazil, Chile, and Peru up and almost every other country down. Southeast Asia exactly countered that small gain with its own $10 million loss. Though Singapore substantially increased its imports of Tennessee goods (mostly medical instruments), it was more than countered by large declines in Indonesia and the Philippines. East Asia was somewhat better, thanks to a 10% gain in China (computers, aircraft, artificial filament) and a 5% gain in Japan (medical instruments, semiconductor devices). Exports to Europe were virtually unchanged from a year ago. Shipments to the euro zone actually increased just under 4% for the quarter, but they were balanced by small losses in the United Kingdom and the other non-E.U. states. Germany, the Netherlands, and Italy were the best markets on the continent, each upping its purchases of Tennessee goods by 6% or more. The Italian gains were entirely because of one product, scrap containing precious metals.

The Gulf region of the Middle East was by far Tennessee's best export market for the quarter. It is a concentrated market, with almost two-thirds of its purchases cars or aircraft equipment, but it is growing robustly. At $350 million, state exports to this region are $130 million higher than a year ago. It accounted for exactly half of the state's global export gains.

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