3rd Quarter 2016



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Exports to the Gulf States dropped
an astonishing 44%, a loss of
$160 million.

 

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Trade Report continued

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But we've saved the worst until last. Exports to the Gulf States dropped an astonishing 44%, a loss of $160 million. Most of this was in the United Arab Emirates, the state's poorest-performing market of any size. Exports there were off more than $100 million, almost all of it automobiles.

Sectorally, the biggest losses were suffered in the automotive sector. Car exports dropped by $60 million, and auto parts were off $64 million. As noted, this was mostly due to the large losses in the Middle East. Canada and China, on the other hand, both saw increased shipments of Tennessee-made autos. Computer sales fell by more than $100 million, with losses concentrated in Mexico and China. Medical goods were down as well, albeit more modestly. Chemicals, artificial filaments, television equipment, and whiskey were other sectors that experienced significant headwinds over the quarter.

However, it was not bad news everywhere. The cell phone industry, in particular, had a good quarter thanks to strong sales in Hong Kong and other Asian countries. Silicon shipments grew dramatically, from virtually zero to over $50 million. The big markets were Taiwan, Germany, Korea, and Japan. Finally, Kraft paperboard exports grew by one-third from 2015.

This was not a good quarter for many state exporters. The near-term future is not promising, unfortunately. The slowdown in Latin America continues, and growth has declined in China as well. On top of this, the strengthening dollar is creating additional headwinds and headaches for Tennessee's businesses. We can only hope that things turn around more quickly than expected. US November exports were up from a year ago. Though Tennessee's suffered a small decline, it was an improvement over the previous seven months. That is not much of a silver lining, however.