California Exports Edge Higher in Latest Numbers
Beacon Economics’ latest California Trade Report published in early August, reveals a mixed picture for California’s international trade in June. The state’s merchandise export trade was valued at $15.8 billion, a modest 1.5 percent increase from the previous year’s $15.5 billion. However, this growth is outpaced by the overall U.S. export increase of 4.2 percent, causing California’s share of the nation’s merchandise export trade to slip to 9 percent from 9.3 percent a year ago.
Despite a 3.5 percent decline in exports of manufactured goods and a 3.2 percent drop in agricultural products and raw materials, re-exports surged by 16.1 percent, reaching $4.5 billion. The first half of 2024 saw California’s exports totaling $89 billion, down 0.6 percent from the same period in 2023.
Jock O’Connell, Beacon Economics’ International Trade Advisor, noted in the report, “Remarkably, the value of California’s merchandise export trade was up in June despite a strong dollar, plunging revenues from the state’s energy exports, and a steady retreat from the formerly robust business of exporting electric vehicles.”
California Imports Rise
California’s import activity in June also showed significant growth. The state accounted for 15.8 percent of all U.S. merchandise imports, valued at $42.1 billion, marking a 12.7 percent increase from June 2023. Manufactured imports rose by 14.4 percent, while non-manufactured imports remained almost unchanged. However, Beacon Economics emphasizes caution in interpreting these figures because the data captures goods destined for other parts of the country but arriving through California ports.
Leading Export Commodities
From April to June 2024, California’s merchandise exports totaled nearly $46 billion, up 2.2 percent from the previous year. Significant growth was observed in several key commodity groups:
- Computer & Electronic Products: Up 16.2 percent to $11.398 billion.
- Non-Electrical Machinery: Increased by 2.7 percent to $4.850 billion.
- Chemical Exports: Rose by 5.6 percent to $4.227 billion.
- Agricultural Exports: Grew by 4.1 percent to $3.533 billion.
- Food & Kindred Products: Increased by 7.0 percent to $2.871 billion.
- Electrical Equipment and Appliances: Up 11.8 percent to $2.385 billion.
- Fabricated Metal Products: Increased by 10.4 percent to $1.460 billion.
- Waste & Scrap Materials: Nudged up 0.8 percent to $1.129 billion.
However, exports of Transportation Equipment fell by 16.6 percent, and shipments of Miscellaneous Manufactured Commodities and Petroleum and Coal also saw significant declines.
Key Export Destinations
Mexico remains California’s top export market despite a slight 0.2 percent decline in imports from the state. Canada, China, Japan, and Taiwan follow as major destinations, with notable year-over-year fluctuations:
- Mexico: $8.370 billion, down 0.2 percent
- Canada: $5.039 billion, down 0.1 percent
- China: $3.760 billion, down 9.7 percent
- Japan: $2.613 billion, down 1.3 percent
- Taiwan: $2.519 billion, up 25.0 percent
California’s exports to East Asia increased by 2.9 percent and to the European Union by 5.6 percent. However, exports to Latin America and the Caribbean dropped by 9.8 percent.
Port Activity and Transport Modes
The latest quarter saw a shift in how goods are transported, with 48.3 percent of exports by air and 24.7 percent by water. California ports handled 10.9 percent of U.S. exports and 20.6 percent of U.S. imports. Notably, container counts at the Port of Long Beach and the Port of Los Angeles grew by 17.3 percent and 3.7 percent, respectively, from June 2023 to June 2024.
The Outlook
Various global factors, including climate change, geopolitical tensions, and potential shifts in U.S. trade policy, influence the outlook for California’s trade. Despite these challenges, international trade growth is expected to increase through the second half of 2024, supported by forecasts from major economic organizations like the IMF, OECD, and WTO. However, potential consumer spending cuts and logistical issues, such as dockworker strikes, could pose risks.
