Tennessee Trade Report 1st Quarter 2022

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 first quarter of 2022 was a good one for Tennessee exporters. Foreign shipments soared to $9.635 billion compared to $7.851 billion in the first quarter of 2021.  This was a gain of 22 percent, exceeding the very strong national growth of 18 percent. Tennessee ranked 11th among the American states in its export growth and rose to become the 15th largest exporting state.

New Exported Products Lead the Way

The primary reason for this growth was a handful of new exports.  Last quarter the state exported $571 million of vaccines, $422 million of platinum scrap, and $160 million of palladium. In 2021, Tennessee did not ship these products at all in the first quarter.  As easily calculated, these new exports accounted for more than $1 billion of the state’s exports in this past quarter.

Smartphones, Computers, and Clothing-Related Goods Were Strong as Well

Several “old” export industries also had very good quarters.  Smartphone shipments continued their ascent, growing from $429 million to $456 million. Most continued to go to Hong Kong and the Philippines but France was a new, significant destination, importing some $25 million of smartphones from Tennessee.  The computer industry also did very well. Exports of laptops rose by 2/3, to $ 137 million, while the shipments of other computers essentially doubled, to $ 154 million. Storage devices for those computers posted stronger growth yet, sextupling to $75 million. Canada was the site of most of these gains. Exports of anything related to clothing were up sharply. Cotton, polyesters, and polyamides all turned in very good numbers. China was the largest destination for these goods, followed by Turkey and Indonesia.

But Medical Instruments were Flat, While Transportation was Down

The state’s largest export industry, medical equipment, posted a small loss (from $666 million to $662 million) due to a sizable drop in sales to Southeast Asia. But other medical goods had a strong quarter. Artificial joints, for example, bounced back to $176 million (they were but $19 million in the first quarter of 2021).  Surgical catgut exports grew by a quarter ($155 million). Antisera shipments more than doubled. The state exported $35 million of covid test kits.  And there were, of course, those vaccines. (About half of the vaccine shipments went to Canada, another $100 million to Nigeria, the rest to 20 other countries.) The only large sector that really struggled was that of transportation. Aircraft, helicopters, motorboats – they were all down.  But of course, for this state automobiles are the big story. And the industry struggled. SUV shipments dropped some $60 million (to $231 million), while cars fared even more poorly (declining from $261 million to $91 million). Fortunately, most motor vehicle part shipments and automotive engine exports at least held their own.  There was one positive exception: a dramatic surge in shipments of gear boxes, from $13 million to $135 million.

The Biggest Gains Were in Europe

Geographically, for the first time in many a year, Europe was the star.  First quarter Tennessee exports to Europe surged by over sixty percent from a year earlier, coming within a few dollars of $2 billion in sales. Most of those new exports cited above went to Europe, Germany in particular.  Exports to Germany alone rose from $300 million to $959 million. Big gains were also made in Spain and Poland.

No other continent saw that kind of growth. But the NAFTA market, Latin America, Central America all had growth rates exceeding twenty percent, while East Asia grew at a more modest 6 percent. The latter, however, was almost entirely due the state’s 19 percent increase in shipments to China. Exports to the Gulf States were also really strong, growing by 47 percent. (But exports to nearby Iraq and Israel were both off substantially.)  The only region that turn in poor numbers was Southeast Asia. There Tennessee’s foreign shipments declined from $572 million to $515 million. This was almost entirely due to the steep decline in the value of the state’s medical instruments going to Singapore.

No Complaints, But What does the Future Hold?

One can hardly complain about the performance of the state’s exporters this past quarter. Though for those wishing to see the glass half-empty, its reliance on new products might be a little worrying. With widespread predictions of a global recession, renewed inflation worries, and the war in the Ukraine, it’s a particularly difficult time to project whether the terrific export numbers of the first quarter will hold up over the rest of the year.  But those same new exports combined with the broad geographic scope of the state’s gains does offer an argument to those preferring to see that glass half-full.