3rd Quarter 2015

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It would be unrealistic to anticipate a rapid turnaround in state export growth.


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Trade Report continued

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The rest of the globe was a bit brighter. Japan (a $12 million gain, to $442 million) and the Eurozone (a $7 million gain, to $972 million) at least held their own. (Britain’s $10 million decline, however, pushed the whole E.U. market slightly into negative numbers.) Korea was up about $20 million, as were the nations of Sub-Saharan Africa. A surge in auto sales to the United Arab Emirates was the key to a surprisingly strong 14 percent increase (to $381 million) of exports to the Middle East. Shipments to the Southeast Asian nations were also up 14 percent. Medical instruments and cotton accounted for much of that gain.

Sectorally, the auto industry continued to forge ahead, with car exports, car engine exports, and many auto parts exports all ahead for the quarter. This industry was joined in the winner’s circle by the industrial instrument sector along with storage batteries.

Unfortunately, as one would expect with negative numbers, more sectors lost than gained. The aluminum industry stands out. With the industry’s troubles well known (and Alcoa closing U.S. smelters), it is perhaps not a surprise that aluminum exports fell from $144 million to $78 for the quarter. That’s equivalent to one-third of the state’s total export losses. Plastics and chemicals both posted sharp losses. The chemical declines were mainly in cellulose and the coloring/dye industry. Foodstuffs did not fare too well either, with frozen chicken exports cut in half and sugars falling from $24 million to $7 million for the quarter. But in truth this was one of the (happily) rare quarters where many export sectors were unable to forge any gains.

With both the IMF and the OECD recently revising their global growth figures downward, it would be unrealistic to anticipate a rapid turnaround in state export growth. The Institute for Supply Management’s October survey continues to report that the trend for U.S. manufactured export orders is contracting. A real turnaround in exports may await a more vigorous global economy. Until then we can hope that Tennessee exports will outpace the nation and perhaps even make some modest gains in a very tough environment.