Wavering economies among key California trading partners in the last half of 2015 landed with a thud in the Golden State in November.
The value of California’s merchandise exports in November was $12.86 billion, down 13.6 percent from $14.89 billion in November 2014 and the worst November showing since 2009, according to Beacon Economics.
Beacon, a consulting firm with offices in the Bay Area and Los Angeles, on Wednesday broke down California’s export totals from U.S. Commerce Department figures.
“Buyers abroad are pinching their pesos, loonies, yuan, yen and euros, assuming they have any,” said Jock O’Connell, Beacon’s international trade adviser. “Then they’re reckoning with the fact their currencies are buying far fewer greenbacks. It’s not an ideal time to be an American exporter.”
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However, Christopher Thornberg, founding partner of Beacon, noted that the annual decline was driven in part by a rising dollar: “It must be remembered that these are nominal figures, and part of the decline is driven by the appreciation of the U.S. dollar over the last year. California exporters price their products in local currencies, meaning a rise in the dollar brings in less revenue from foreign sales.”
By that reckoning, Beacon’s California export price index suggests a 7 percent decline in the value of exported goods, equating to real exports declining about 6 percent, by volume, in the period.
Beacon said California’s exports fell across the board, year over year.
Shipments of manufactured goods totaled $8.1 billion in November, down 13.4 percent from $9.36 billion last year. Exports of non-manufactured goods – chiefly agricultural produce and raw materials – tumbled more than 17 percent, to $1.77 billion from $2.14 billion. Re-exports fell nearly 12 percent, to about $3 billion from almost $3.4 billion.
Owing to a stronger showing early in 2015, Beacon noted that California’s year-to-date export trade through November 2015 was lagging the previous year’s record pace by only 4.3 percent.
California exports hit an all-time record of $174.13 billion in 2014. On a straight-up dollar basis, not accounting for inflation, 2014 marked the fourth consecutive year of record-setting exports.
Beacon said it did not expect California’s December export numbers to reverse the downward spiral.
Previous Beacon reports indicated a slowing of economies in traditionally strong markets receiving California merchandise, particularly China, which just this week saw a meltdown in stock prices. O’Connell noted that trade with Canada and Japan also slowed near the end of 2015.
California is not the only one feeling the impact of the global economic ripples. Beacon said Wednesday that the value of merchandise shipped by business rival Texas in November was down 14.4 percent from the prior year. U.S. exports fell 10.4 percent in the year-over-year period.
On the import side, California took in $36.11 billion in goods in November, up 1.4 percent from $35.61 billion in November 2014. Some goods entering California go to other states, so exports are considered a more accurate measure of the state’s trade health.