Exports and employment may have little linkage

In yesterday’s report for Logistics Management – our sister publication – we noted that California’s economic recovery is slowly getting underway.

But Jock O’Connell, Beacon Economics’ International Trade Adviser said that exports are not necessarily going to generate more supply chain jobs.

Asked about the prospects of seeing strong employment growth resulting from the increase in export activity, O’Connell was not especially sanguine.

“At some point, you would naturally expect higher exports to goose the employment numbers,” he said. “However, California firms have made great strides in efficiency, enabling them to do more with less. Bear in mind that, while manufacturing output in this state increased by about 50 percent in this decade, employment in our manufacturing sector declined by one-third.” 

There are currently about 4,800 fewer workers in the manufacturing sector and 6,800 fewer in the transportation and warehousing sector than there were last October, according to figures from the state’s Employment Development Department.

“Exporters are also likely to be worried about the outlook for California exports going into the new year,” O’Connell observed.

“Austerity measures across Europe, an appreciating Japanese currency, unrest in Mexico, and renewed efforts by Chinese authorities to slow down their economy could all put a serious damper on California exports.”

SC
MR