California’s Healthy Outbound Supply Chain
January 17, 2012
California’s exporters turned in another strong performance in November, marking the 25th consecutive month in which the state’s merchandise export trade increased on a year-over-year basis.
The value of goods shipped abroad by California businesses in November reached $14.07 billion, a nominal gain of 12.7 percent over the $12.49 billion reported in November 2010, according to an analysis by Beacon Economics of foreign trade data released late last week by the U.S. Commerce Department.
Total U.S. merchandise exports were up 12.1 percent over the same period.
California’s exports of manufactured goods edged up 9.6 percent to $8.57 billion, while non-manufactured exports (chiefly raw materials and agricultural products) were up 16.3 percent to $2.14 billion. Re-exports, meanwhile, rose by 18.7 percent to $3.36 billion.
“Even in inflation-adjusted terms, 2011 will easily turn out to be the best year ever for California’s export trade,” said Jock O’Connell, Beacon Economics’ International Trade Adviser.
Through November, the state’s merchandise export trade for 2011 amounts to $145.81 billion. The best previous year was 2008, when exports through the first 11 months totaled $141.26 billion (in 2011 dollars).
Overall, the California economy is showing strong signs of turning the economic corner. Beacon Economics’ Founding Partner Christopher Thornberg said job growth, consumer spending, non-residential construction and industrial vacancies have all showed signs of strong improvement in recent months. “Much of the momentum behind California’s economy can be traced back to the state’s resurgent export sectors,” Thornberg said.
While Beacon Economics expects the state’s export trade to continue expanding in 2012, it warns that the pace of growth will likely slow.
“The near-term outlook has some risks,” O’Connell said. “Europe is flirting with recession, and the dollar has gained ten percent in value since August as a result, reducing a portion of the newfound competitiveness of U.S. products.”
“Fortunately, our two biggest foreign markets, Mexico and Canada, remain on more solid economic footing,” he said.
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