News Column

California Exports Barely Budged in June

August 7, 2013

California export trade essentially held serve in June, compared with the year-ago period.

California businesses shipped merchandise valued at $15.23 billion in June, up about 0.3 percent from $15.18 billion in June 2012, according to an analysis of Tuesday's U.S. Commerce Department figures by Beacon Economics, a consulting firm with offices in the Bay Area and Los Angeles. However, Beacon officials noted that the year-over-year increase was essentially canceled out by inflation.

"June was another of those 'apparently up but actually down' months," said Jock O'Connell, Beacon's international trade adviser.

Still, the June numbers were up substantially from shipments valued at $13.25 billion in May this year. And consider that California exports in June 2011 amounted to $13.83 billion.

Exports of manufactured items rose from about $9.7 billion in June last year to about $9.8 billion this year. Shipments of non-manufactured goods (chiefly agricultural produce and raw materials) also edged up, from $1.59 billion to $1.64 billion.

However, re-exports declined from $3.89 billion to $3.79 billion year over year.

Through the first half of the year, California's $80.92 billion in export trade is running slightly behind $81.97 billion recorded in the first six months of 2012.

Christopher Thornberg, Beacon's founding partner, said flat growth was a reflection of international markets. "With the U.S. dollar 20 percent weaker today than it was a decade ago, products produced here are more competitive than they have been in a long time," Thornberg said. "The issue is that global trade has more or less stopped growing with Europe in a recession and China seeing slower expansion."

Beacon is projecting modest growth for California exporters in the short term.

"It does appear that Europe has found a bottom, and with Japan continuing to stimulate its economy and better numbers on consumer spending from China, we hope that export growth will return by next year," Thornberg said.

On the import side, California took in $32.03 billion in June, down about 1.3 percent from $32.47 billion in June last year. Some goods entering California go to other states, so exports are considered a more accurate measure of the state's trade health.

Nationally, the U.S. trade deficit plunged more than 22 percent from May to June, with June's $34.2 billion imbalance representing the lowest gap since October 2009.

The Commerce Department said U.S. exports of goods and services rose 2.2 percent month-over-month to an all-time high of $191.2 billion in June. Officials said U.S. companies shipped large quantities of aircraft engines, telecommunications equipment, heavy machinery and farm goods.

Meanwhile, imports dropped 2.5 percent to $225.4 billion as oil imports declined to their lowest level in more than two years.

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(c)2013 The Sacramento Bee (Sacramento, Calif.)

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