Tennessee Trade Report 2nd Quarter 2022
Tables and Graphs
The second quarter of the year was a strong one for Tennessee exporters. Exports rose to $9.848 billion, a 17.3 percent increase from the second quarter of last year. This was the 23rd best performance among the 50 states, as nationally exports rose 22.1 percent.
Strong Numbers from New Export Industries, and Old
The state's largest export sector, medical instruments, actually fell about ten percent for the quarter. This was mostly due to a steep fall-off in Singapore, one of the largest markets for this sector. But this was very much the exception for the state’s larger industries. Car and car part exports combined to $952 million for the quarter, a huge forty percent increase likely due to the unsnarling of supply chain problems over the past few quarters. Foreign shipments of computer-related goods (including flash drive type storage units) grew from $410 million to $544 million. Cotton also had a strong quarter, gaining more than fifty percent (to $352 million). Much of the export growth was again provided by a handful of new (or vastly increased) export goods. For the fourth quarter in a row, Tennessee exported large quantities of covid vaccines. $184 million dollars worth, to be exact. About sixty percent of this went to Canada. Note that, while a large number, the value of these exports is significantly reduced from the past several quarters. Vaccines were joined by remarkably large increases in palladium shipments and platinum waste shipments. They combined to rise from virtually $0 to over $500 million for the quarter. These are raw materials used in catalytic converters. Germany was the destination of virtually all of this and is the reason for why Germany was one of the state’s best performing markets for the quarter.
Germany was Joined by the USMCA Countries as the State's Best Markets
Germany was the major reason for a big jump in Tennessee exports to the euro region, while shipments to the UK were up by $21 million. It was the neighboring USMCA countries in which state exporters posted the biggest dollar gains. Shipments to both were up by 25 percent to a combined $3.4 billion. In the case of Mexico, this was automotive activity, while Canada added substantially larger computer-related shipments to automotives and to the vaccines of which we spoke above.
Exports increased to Latin America, but Elsewhere it was a Mixed Bag
It was a mixed bag in the larger Asian markets. Despite China’s current difficulties, Tennessee’s exports did rise by 10 percent. Cotton was the major reason. But if combined with Hong Kong’s losses, the state’s $1.2 billion in exports were about the same as last year’s for the second quarter. Japan posted a modest gain from $523 million to $544 million. The medical sector continues to be the most significant export sector to that country. Elsewhere, shipments to Latin America were up strongly, mostly due to Brazil and Colombia. Thanks to losses in Singapore, the southeast Asian region saw roughly the same export performance as last year.
The Costs of War
All in all, it was a pretty good performance, although much of it was due to some exports that are unlikely to post such spectacular numbers in future quarters. We might end by noting the local effects of the war in Ukraine. Tennessee exports to Ukraine collapsed, from about $6.3 million to $1.5 million this past quarter. Exports to Russia, meanwhile, almost vanished (from $62 million to $1 million). As if we didn’t know it, war is not good for trade.
