Tennessee Trade Report 3rd Quarter 2023

Tables and Graphs

Tennessee's Largest Export Industries

Tennessee's Largest Markets

Tennessee's Most Rapidly Growing Exports

Tennessee's Most Rapidly Growing Markets

Tennessee exports declined by 2.4 percent this past quarter from last year’s third quarter. The loss of over $230 million in foreign shipments is hardly good news, though it only placed the state in the middle of the pack (ranked 25th) of what was not a particularly strong quarter for American exports overall.

One factor in Tennessee’s decline was another drop in human vaccine shipments.  Recall that these unexpectedly surged during the pandemic years. This past quarter they fell by $200 million to $165 million, all going to Canada.  Without this loss, state exports would have been roughly equal to 2022’s third quarter. However before we write off future vaccine exports, note that all of remaining exports came in September, this after several months of no vaccine exports at all.

Exports Were Strong Inside the USMCA

State exports were down globally with the important exception of the USMCA zone.  Exports to Mexico surged by over 20 percent. The gains were across many sectors, including automotive engines, automotive lighting, laptops, cars, and writing pens and markers. Canada’s numbers were a bit deceptive due to that sizable drop in those vaccine exports.  Excluding them, our northern neighbor saw a nearly $200 million increase in shipments from Tennessee. Cars were again, and by far, the major reason for that. Canada also purchased $39 million of bituminous coal, against none last year.

...But Generally Weaker Elsewhere

The other continents all proved less friendly. In Europe, Tennessee exports were sharply down in Belgium, France, and Germany.  In France, falling medicament shipments were the problem while for Germany it was primarily the automotive sector. Only the Netherlands (whisky, computers, orthopedics) posted strong numbers for state exporters. The EU in its entirety saw Tennessee shipments fall by nearly 10 percent (to $1.487 billion) for the quarter. A loss of $60 million in aircraft shipments put the U.K. under water as well.

Exports to Latin America were down 7 percent, most of the losses felt in Brazil. A steep $40 million in cotton exports to Turkey combined with drops in auto exports throughout the regime to cause substantial losses in the Middle East.  SUVs sales were hit hard. Saudi Arabia and the U.A.E., the usual large purchasers, each bought $30 million in value less than they had a year earlier.

While Southeast Asia was mostly flat, East Asia was a different story.  China’s economic slowdown was seen in the export statistics. Shipments from Tennessee were down 8 percent, the losses concentrated in the medical and textile sectors.  Shipments to Taiwan fell by almost $25 million (22 percent).  The one strong market was Hong Kong, where exports were up by a remarkable 50 percent (more than $100 million). Products at the opposite ends of the technology scale, smartphones and cotton, combined to produce that big rise.

Tough Times for the Clothing Industry?

One clear theme across the continents was the struggle of the global clothing industry. Tennessee’s cotton exports fell from $256 million to $202 million, with India and Pakistan joining Turkey with large declines.  But polyester shipments from Tennessee fell from $174 million to $57 million while polyamides (nylons) dropped from $44 million to $7 million.

We will end by noting that it was certainly not all bad news, as products such orthopedics, medical needles, EVs, and various computer parts all had strong quarters. The bottom line, though, is that when neither Europe nor East Asia have strong economies, it’s a tough ride for state exporters.