Big jump in California exports

California firms established a new record high for merchandise exports in 2011, edging past the former high-water mark set eleven years earlier during the dot com boom.

Adjusting for inflation, the total value of goods shipped abroad by California companies last year exceeded the 2000 mark by nearly 2 percent, according to an analysis by Beacon Economics of foreign trade data released by the U.S. Commerce Department.

“Despite a widespread conviction that California has been closed for business, 2011 turned out to be the best year ever for California’s export trade,” said Jock O’Connell, Beacon Economics’ International Trade Adviser.

Mexico was California’s leading export market last year, with Canada, China, Japan, and South Korea rounding out the top five destinations for state exports.

Exports were led by shipments of high-technology goods, principally electronics products, industrial machinery, and medical equipment.

SCMR also learned that for the second consecutive year, the Port of Los Angeles experienced record-breaking exports as outbound container volumes surged 14.5 percent in 2011 compared to 2010.

California’s $159.35 billion merchandise export trade in 2011 represented a nominal increase of 11.2 percent over the $143.27 billion reported in the preceding year. Manufactured exports were up 7.3 percent to $102.11 billion, non-manufactured exports rose 15.9 percent to $20.21 billion, and re-exports jumped by 20.5 percent to $37.04 billion.

However, a slowing global economy took a toll on the state’s export trade in December. While California’s exports that month reached $13.54 billion, the nominal increase of 1.5 percent over the $13.34 billion reported in December 2010 was more than offset by inflation. December’s total was also down 4.0 percent on a seasonally-adjusted basis from the preceding month.

“The probable near-term outlook will be sluggish growth in California’s export trade,” O’Connell said. “Nearly all major forecasts, including the most recent updates issued by the International Monetary Fund, have been revising downward their 2012 growth expectations for most major economies - including all of California’s principal trading partners.”

Still, while the slowdown at the end of 2011 is likely related to a decelerating global economy and falling imports from China, Beacon Economics’ Founding Partner Christopher Thornberg says it is important to note that December numbers are always tricky due to variables related to the holidays and end-of-year issues.

“We’re cautious, but not drawing any lines in the sand until we see what January and February have to tell us,” Thornberg said.

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