Tennessee Trade Report 3rd Quarter 2024
Tables and Graphs
It was a middle-of-the-pack quarter for Tennessee exporters. The 3rd quarter saw state exports rise 2.3 percent, to $9.65 billion. Exports grew at almost the exact same rate as that of the nation, and Tennessee ranked 25th, exactly in the middle, among the American states in its growth rate. (Tennessee ranked 18th in the dollar value of its exports.)
Canada Down, Mexico Up
The most significant single story was a substantial drop in shipments to Canada. At $1.94 billion, exports to Canada fell by nearly $400 million from the 3rd quarter of last year, a 16 percent decline. The loss of human vaccine exports ($164 million to $18 million) played a big part in the loss. But it wasn’t that simple. Automobiles, long the biggest state export to Canada, suffered sizable reverses. Car exports fell from $166 million to $100 million, while SUVs dropped from $239 million to $149 million. A surge of EV shipments, which gained $51 million, helped but could not overcome these reverses. One result of all this is that, once again, in dollar value, shipments to Mexico crept ever closer to that of Canada. Shipments south of the border rose 11.5 percent, to $1.69 billion. A big reason was a huge increase in lithium ion batteries (up by $132 million), but, unlike Canada, auto shipments were also strong, with exports of cars gaining $77 million, to $103 million. Is it possible that Mexico could once day become supplant Canada as Tennessee’s largest export destination?
A Solid Quarter in Europe...
Exports to the euro zone were generally strong, rising by 10 percent, but this hides some significant swings across the different markets within the euro area. France performed the most poorly among the major markets, thanks mostly to a sizable decline in aircraft purchases. The lion’s share of Tennessee shipments to Europe go to three countries: the Netherlands, Germany, and Belgium. (This is a bit of an illusion though, as much of these shipments are actually coming through ports in these countries but are intended for elsewhere). The state experienced a modest loss in Germany, thanks to a decline in waste and scrap sales, but gained in both Belgium and the Netherlands. Hearteningly, the gains were across a wide range of industries. Exports to the UK, the major non-euro trade partner, were essentially flat ($177 million vs. $180 million).
...But Asia was a Mixed Bag
Shipments to the pacific rim have long been a major driver of Tennessee’s export growth. Not so much the case this past quarter. China was strong, as per usual. Exports were up better than 7 percent, led by various chemicals and medical products. Taiwan gained almost a quarter thanks to increased computer shipments (no surprise there!). But elsewhere was trouble. Shipments to South Korea didn’t move (dropping by $1 million) while exports to Japan and Hong Kong dropped substantially. For Hong Kong, the problem was smartphones (the state’s leading export there) and cotton. For Japan, it was an odd combination of woodpulp and artificial joints. Elsewhere in Asia, exports to the nations of southeast Asia (ASEAN) grew by 8 percent ($552 million) led by a solid increase in smartphone shipments to the Philippines and a variety of products to Vietnam. This gain was unusual because it overcame a small loss in Singapore, the region’s biggest market. Tennessee also posted an 8 percent gain in India (to $130 million). Exporters made large gains in the state’s three large Middle Eastern markets. Exports to Turkey soared from $29 million to $57 million, primarily due to bituminous coal. Exports to Saudi Arabia grew twenty percent to $75 million, thanks most due to automobiles. And exports to the United Arab Emirates more than doubled, to $179 million. This was among Tennessee’s best markets anywhere, and due to cars and SUVS, artificial filament, and whiskey.
And More Modest Gains in South America
Finally, exports to Latin America also grew this past quarter, albeit more modestly. Tennessee survived a substantial drop in sales to Argentina and Chile to forge a 2 percent gain to that continent. Brazil ($186 million to $233 million) was the major reason but there were strong gains to Colombia and Peru as well.
A Strong Quarter for Whiskey, Chemicals, Computer Systems, and Medical Devices
A number of products had very good quarters. In no particular order, whiskey sales were up globally by 38 percent (to $267 million), while bituminous coal, a relatively new export, also saw large growth, mostly in Europe (to $125 million). It was a good quarter for polyesters ($162 million, more than double the 3rd quarter of 2023), cellulose acetates, organic chemicals, computer systems, and medical instruments. The latter crossed the billion mark, with exports of $1.197 for the quarter. Automobiles were up and down as car shipments were strong ($206 million to $274 million) but SUV shipments weak ($272 million to $196 million). EVs had a very good quarter, with shipments climbing from $99 million to $183 million.
Of course it wasn’t good news everywhere. Hard hit this past quarter were cotton (off by a third, to $148 million), artificial joints (losing exports valued at $132 million), laptops (down by almost one-half, to $116 million), office machine parts (falling from $115 million to $29 million) and vaccines.
So, although the dollar value of Tennessee exports didn’t change all that much overall, this hides some very large swings in the state’s export performance. There does not, however, seem any unifying big or dramatic story to them. Whether this will change with the new administration, and a new trade policy, will be one of the big questions of the coming year.
