export council feb 8 new
TRANSCRIPT
WASHINGTON STATE DEPARTMENT OF COMMERCE
Spencer CohenResearch Manager
8 February 2011
Washington State Export TrendsUpdate through November 2010 YTD
Data Issues
• We use data provided by WISER Trade, a wholesale distributor of U.S. Census Bureau data.
• Today we’ll review data through November 2010.
• Data is pretty reliable, but some issues we need to correct for.
• Services exports not trackable at state level.
Merchandise and Commodities Exports by Segment1996 to November 2010 YTD
0
10
20
30
40
50
60
Bill
ion
s U
SD
TOTAL, no corrections
TOTAL, corrected
Aerospace
Non-aerospace, non-agricultureAgriculture and food
Correction of $5.7 billion
Largely driven by Chinese soy bean consumption.
Data source: WISER Trade
0
2
4
6
8
10
12
14
16
18
Bill
ion
s U
SD
Total
Total, corrected
Aerospace
Non-aerospace, non-agriculture
AGR and FOOD
Washington Quarterly ExportsBy segment • Total Washington exports
dropped at tail-end of “official” U.S. recession and have since recovered. However, much of this drop due to decline in aerospace exports.
Data source: WISER Trade
Official period of recession
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
Washington U.S. Washington non-aerospace exports
Year-over-Year (YoY) Changes
Data sources: WISER Trade; World Trade Organization.
• Washington total exports have been outpaced by the U.S. the past three quarters, but this primarily driven by declines in aerospace exports.
• Non-aerospace exports have performed much better.
The “Great Contraction”—global trade in manufacturing declined 15.5% in 2009, agriculture trade down 3%
Composition of ExportsBy quarter
Data source: WISER Trade
50.6%
14.6%
11.9%
0%
10%
20%
30%
40%
50%
60%
70%
Q1
20
06
Q2
20
06
Q3
20
06
Q4
20
06
Q1
20
07
Q2
20
07
Q3
20
07
Q4
20
07
Q1
20
08
Q2
20
08
Q3
20
08
Q4
20
08
Q1
20
09
Q2
20
09
Q3
20
09
Q4
20
09
Q1
20
10
Q2
20
10
Q3
20
10
Aerospace Top 10 non-aerospace exports, by 6-digit HS Agriculture and food
• Washington’s distribution of exports by product has been fairly consistent, with aerospace constituting more than 50% of total exports by quarter (excluding 2008 strike period)
Boeing strike
Exports through November 2010Changes and contributions to net change, by 10 largest export products for Nov 2010 YTD
Major Product Category(2-digit HS Codes)
NOV 2009 YTD NOV 2010 YTD CHANGE Contribution to Change*
TOTAL 41,141,985,563 41,779,993,916 638,008,353 --Aircraft, Spacecraft, and Parts Thereof 23,373,694,941 20,820,804,810 -2,552,890,131 -85.4%
Industrial Machinery, Including Computers 1,469,824,935 1,855,088,797 385,263,862 10.6%
Electric Machinery; Sound Equip; TV Equip; Parts 1,460,519,122 1,681,152,670 220,633,548 6.1%
Mineral Fuel, Oil; Bitumin Substances; Mineral Wax 1,612,606,793 1,644,675,972 32,069,179 0.9%
Optic, Photo; Medical or Surgical Instruments 1,327,782,458 1,489,185,900 161,403,442 4.4%
Wood and Articles of Wood; Wood Charcoal 782,103,320 1,176,349,380 394,246,060 10.9%
Cereals (Wheat and Meslin) 1,070,782,859 1,165,722,723 94,939,864 2.6%
Inorganic Chemicals; Precious & Rare-Earth Metals & Radioactive Compounds
751,524,408 1,116,416,203 364,891,795 10.1%
Edible Fruit & Nuts; Citrus Fruit or Melon Peel 819,021,202 850,004,478 30,983,276 0.9%
Iron and Steel 516,960,189 805,803,359 288,843,170 8.0%
*Based on share of gross, year-to-year gains or losses, depending on direction of year-to-year change. Data source: WISER Trade
Aerospace ExportsTop Markets
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
Qatar
Indonesia
Ireland
Japan
China
Billions USD
Largest Markets, Nov 2010 YTD
November 2010 YTD
November 2009 YTD
0 500 1,000 1,500
China
Egypt
Norway
Ethiopia (New)
Japan
Malaysia
Germany
Qatar
Turkey
Indonesia
Millions USD
Largest Absolute Increases, November 2010 YTD
Data source: WISER Trade
• Overall aerospace exports down 10.9%, driven by declines of 69.2% UAE (21.5% of total decline) and 92.3% to France (17.1% of total decline).• Sales to Indonesia grew 236.2%.
Five Largest Markets for Washington ExportsTotal exports
$1.8
$1.8
$4.9
$5.9
$6.3
$0.7
$1.4
$4.2
$5.1
$6.1
Indonesia
Korea, Republic of
Japan
China
Canada
November 2009 YTD November 2010 YTD
• In any given year, Washington’s top 10 largest markets combined have averaged roughly 2/3 of all state goods exports.
• All top five markets have shown growth over 2009, though some of these mainly due to aerospace (e.g. Indonesia)
• Exports to China grew at per annum rate of 14.0% from 2000-2009.
Data source: WISER Trade
Billions USD
Non-aerospace, Non-agriculture ExportsNOV 2010 YTD compared with NOV 2009 YTD
• 46% of ALL GROWTH from three countries: Canada (contributed 16.7%), China (16.6%), and Japan (12.7%).
• Exports to China grew at per annum rate of 14.0% from 2000-2009.
• Exports to China have grown more than 500% from 2000 to 2009—an average annual rate of 22%.
$0.7
$0.7
$1.6
$1.9
$4.8
$0.4
$0.6
$1.2
$1.4
$4.3
Taiwan
Korea, Republic of
Japan
China
Canada
November 2009 YTD November 2010 YTD
Data source: WISER Trade
Billions USD
Washington’s Top Five Agriculture and Food Export Markets
• Overall food and agriculture exports grew 12.5% through November 2010 over same period in 2009, and 8.0% per year from 2000-2009.
• Among top five markets, Philippines led with 27.7% growth , followed by Mexico (11.1%).
• China was sixth largest market, and grew 41.9% (averaged 15.8% growth per year 2000-2009).
$274
$283
$288
$1,012
$1,251
$246
$276
$225
$944
$1,138
Mexico
Taiwan
Philippines
Canada
Japan
November 2009 YTD November 2010 YTD
Billions USD
Data source: WISER Trade
Non-Aerospace Exports by Product and MarketLargest absolute increases, NOV 2010 YTD compared with NOV 2009 YTD
Country Product (6-digit HS Code) Change, 2010-2011 Absolute Increase
CHINA Coniferous Wood in the Rough, Not Treated 831.9% 233,293,828
CHINA Silicon Contain by Weight Nt < 99.99% Of Silicon 357.9% 112,888,315
JAPAN Medicaments Nesoi, Measured Doses, Retail Packaged Nesoi No Exports in 2010 105,844,876
SINGAPORE Silicon Contain By Wt Nt < 99.99% Of Silicon 6481.4% 90,221,702
CHINA Copper Ores and Concentrates 74.7% 87,493,877
TAIWAN Ferrous Waste & Scrap Nesoi 581.6% 81,704,378
JAPAN Uranium Enriched in U235; Plutonium 42.4% 66,679,440
CAN Light Oils& Prep (Not Crude) from Petrol & Bitum 49.8% 66,394,060
TAIWAN Machines for Man. Semicondutor Devices/Elec IC 371.4% 58,580,554
CHINA Mink Furskins, Raw, Whole 63.4% 56,696,018
Data source: WISER Trade
• Of Washington’s top 50 non-aerospace product-markets, 14 were in Canada.
• Ultrasound equipment sales to China grew 22% over first 11 months of 2009 ($90.2 million YTD)
State ExportsYear-over-year change (YoY)
Data sources: WISER Trade; U.S. Census Bureau.
• November 2010 YTD (RHS)
• Note: Washington exports are corrected here, but Illinois data is raw and undercounts exports of soy.
21.3%
1.6%
15.5%
17.9%
19.3%
19.8%
27.0%
TOTAL ALL STATES
…
Washington …
New York
Florida
Illinois
California
Texas
20.1%
17.1%
19.2%
22.4%
23.0%
24.5%
28.3%
11.5%
19.1%
22.9%
21.0%
27.0%
22.5%
23.6%
Washington
…
New York
Florida
California
Illinois
TOTAL ALL STATES
Texas
Q3 2010 YoY
November 2010 YTD YoY change
• Non-aerospace, non-agriculture (LHS)
• Top 5 states (by total exports), plus U.S. and Washington.
Role of Exports in WashingtonAs percentage of gross business revenue
• The long-term trend is a continuing and growing reliance on exports in the manufacturing sector.
Data sources: WISER Trade; Washington State Dept. of Revenue.
28.8%
38.8%
15.4%
22.7%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
20
05
Q1
20
05
Q2
20
05
Q3
20
05
Q4
20
06
Q1
20
06
Q2
20
06
Q3
20
06
Q4
20
07
Q1
20
07
Q2
20
07
Q3
20
07
Q4
20
08
Q1
20
08
Q2
20
08
Q3
20
08
Q4
20
09
Q1
20
09
Q2
20
09
Q3
20
09
Q4
20
10
Q1
20
10
Q2
GOODS SECTOR
MFG SECTOR
MFG minus aerospace
Linear (MFG SECTOR)
Possible Future Scenarios That Could Impact Washington Exports
• China allows the RMB to float (+, but unlikely)
• Though the government could still counteract this measure by lowering domestic interest rates to support tradable goods sector, and maintain under pricing of many other inputs, e.g. land and energy (-)
• U.S.-South Korea FTA (+, though not clear yet to what extent)
• Fed slow to contract U.S. money supply post-recovery, lets dollar depreciate, boon to exporters (+)
• Series of “trade wars” and wave of currency depreciations (especially if China continues to keep RMB undervalued), pushing adjustment from one country to the next (“beggar they neighbor” scenario) (-)
• More 787 delays (-)
Commerce Quarterly Trade Bulletin
• Quarterly publication that reviews most recent export trends, downloadable from Commerce website.
• Interviews with companies and stakeholders, e.g. CEO of Expeditors International (December/January issue), exporting SMEs (all issues), and CEOs of Ports of Seattle and Tacoma (March 2011 issue).
• More than 8,000 direct recipients, and growing.
Appendix
Overview of Data
• We use data provided by WISER Trade, a wholesale distributor of U.S. Census Bureau data.
• Full 2010 not yet available, so today we’ll work with November year-to-date data.
• Data is state-of-origin, based on filing of exporter in customs declaration form.
• In theory, above definition excludes all goods that originate elsewhere in the U.S. and only pass through Washington, and includes goods from Washington that ship from ports outside the state.
• But, definition of “state-of-origin” includes where product is consolidated prior to export, so includes soy beans, corn, and rice, which are not grown in Washington
• Magnitude of distortion: Washington was credited with $3.7 billion in soy bean exports in 2009, equal to 34% of total agriculture exports, and more than ten times amount credited to Iowa and three times Illinois.
• In the Commerce Quarterly Trade Bulletin, and throughout this presentation, we attempt to correct for this distortion
Services Exports
• Data is only for merchandise and commodities—it does not include services (e.g. Microsoft products, online sales, legal services, royalties, expenditures by foreign nationals, foreign students, architecture services, etc.).
• 2002 Input-Output Model estimates state services exports of $16.9 billion, but we think this number has increased since then.
• Problem—no method/data that enables us to track services exports annually
• Input-Output Model every five years, with significant time lag (e.g. 2002 model not released until 2008, due to breadth of survey, data source triangulation, and timing of U.S. Economic Census).
• U.S. national services exports data not very good right now (only simple breakdown by type)
• Nonetheless, services exports critical to state economy.