Tennessee Trade Report 1st Quarter 2020
Tables and Graphs
Tennessee's Largest Export Industries
Tennessee's Largest Markets
Tennessee's Most Rapidly Changing Exports
Tennessee's Most Rapidly Changing Markets
The calm before the storm. That’s the best way of describing the year’s first quarter. Tennessee exports performed surprisingly well. Foreign shipments fell $200 million from a year earlier (a loss of 2.5 percent from the 1st quarter of 2019), but those losses came in March. Exports were actually up in January and February. The early impact of the collapse in trade following COVID-19 began showing in March.
The Trend Remained the Same: Medical Up, Cars Down
State exports followed the same pattern as the past several quarters. Anything medical grew rapidly. Medical instrument exports increased by over $150 million for the quarter. Orthopedic shipments gained another $100 million. Only pharmaceuticals bucked the trend, with shipments falling by about $30 million from a year earlier. Against the gains in that sector, the auto industry continued to struggle. Car exports were down almost $100 million, a fifteen percent drop. Auto parts were down, as were diesel engines, and aluminum plating (used for bodies). Again, one commodity, car engines, bucked the industry’s trend, as its shipments more than doubled (to $107 million) for the quarter.
With the exception of aircraft, where shipments dropped by nearly a third ($100 million dollars), most other export sectors did not see major movements. Chemicals were down, but not significantly. Kraft paper and construction machinery also fell. A noteworthy gainer was platinum scrap. Tennessee upped this export by a quarter.
North America was the Toughest Market
The toughest region for state exports this quarter was North America. Exports to Canada fell by $200 million, and to Mexico by almost $150 million. The biggest issue in both markets was the automotive industry. South America was also a difficult market, although mostly because of the Argentina debt crisis. Tennessee shipments to South America fell from $404 million to $379 million, but exports to Argentina simply collapsed, dropping from $114 million to $34 million. A little math tells us that exports to the rest of the continent actually increased for the quarter. A surprising amount of the gains were due to computer equipment.
...But Shipments to Europe Gained Substantially
Exports to the euro market gained almost $300 million this past quarter. This was overwhelmingly due to medical-related goods. Belgium, Germany, Ireland, and the Netherlands all significantly ramped up purchases of these goods. Exports to the UK, on the other hand, fell by over $60 million. This was entirely the result of large aircraft purchase back in the 1st quarter of 2019 that was not repeated this year.
...While Asia was a Mixed Bag
Asia was a mixed bag. It is probably no surprise that exports to China fell. However, its ten percent decline was not as massive as one might have expected. One reason for this was a significant increase in medical exports to that country. Exports to South Korea also fell by about ten percent, while shipments to Japan rose by that same percentage. At the risk of becoming a broken record, medical products were the reason for the growth to Japan. Finally, Tennessee exports to Southeast Asia were up nearly $50 million (to $590 million). This was mostly due to a significant rise in shipments to Singapore.
The Coming Collapse in Trade does Hide Some Big Trends
The quarter, of course, is already in the shadow of what comes next. But let’s not overlook two big trends. On the positive side, the steady and sizable growth in exports of a large number of medical goods. On the negative side, the continuing struggles of the automotive industry. Both trends will be overwhelmed by the pandemic in the near future. But further ahead, they appear to be the most significant developments in Tennessee’s trade picture.