California feels China’s pain.
The recent economic struggles of the populous overseas nation have caused a slowdown in the state’s export trade industry.
The latest evidence came in October 2015 figures released by Beacon Economics, the consulting firm that breaks down California’s export totals from U.S. Commerce Department figures. Beacon said in-state businesses shipped merchandise valued at about $14.7 billion in October, down 5.4 percent from $15.53 billion sent abroad in October 2014.
Amid the sea of data in the report was this: California shipments to China in the August-to-October period fell by 11.4 percent, from $4.19 billion last year to $3.71 billion in 2015. Shipments declined across the board, from computer equipment to agricultural products.
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“It’s very much indicative of China’s wobbly economy for the past several months, and the authorities there have not figured out how to respond,” said Jock O’Connell, Beacon’s international trade adviser.
It’s not just China, O’Connell noted Monday. California shipments to other key trading partners also have hit the skids.
During the August-October period, exports to Canada tumbled from $4.9 billion to $4.32 billion from the year-earlier period, a decline of 12 percent. Exports to Japan declined by nearly 5 percent, from $2.97 billion to $2.83 billion.
Analysts said other factors have contributed to the declines. California’s ongoing drought prompted less planting, with a corresponding decline in products shipped abroad. But that was a relatively minor factor compared with the sluggishness of international economies, including Europe.
“With the economies of Canada, China and Japan – three of (California’s) top four export markets – all slowing appreciably, October’s export numbers were less bad than might be expected,” O’Connell said.
California exporters might find solace in the fact that others are doing worse. Beacon said U.S. merchandise export trade in October was down 10.2 percent from October 2014. California’s periodic rival for business, Texas, saw a nearly 13 percent year-over-year decline.
Through the first 10 months of this year, Beacon said California exports are lagging last year by 3.3 percent. Given current economic conditions worldwide, O’Connell said there’s no chance of the fourth quarter producing a turnaround that would allow them to catch up.
That means the 2015 numbers will break a four-year winning streak for the state’s merchandise export industry. California exports hit an all-time record of $174.13 billion in 2014.
Records aside, O’Connell said California businesses are managing to do relatively well in international markets that “are likely to continue to slow down.”
However, he warned that China’s economic woes ultimately could have an impact on international markets that previously benefited from China’s economic power: “China led the world recovery, but as its economy continues to slow down, countries that saw China stimulating their own growth are now in trouble … including Australia, Canada and Brazil.”