Oregon exports up strongly, outpace U.S.

In stark contrast to more subdued growth nationally, Oregon’s export trade continued to show strong performance in December, according to Beacon Economics’ analysis of foreign trade data released Thursday by the U.S. Commerce Department.

The total value of Oregon’s exports in December totaled $1.87 billion, a 15% nominal increase over the same time last year. In contrast, U.S. exports were up just 1.5% year-over-year.

That was an improvement over the already strong 12.2% year-over-year growth last month. In real terms, Oregon’s exports increased by 22% due to a 5.7% year-over-year decline in Beacon Economics’ estimate of overall trade prices in the state.

Manufactured goods exports drove the December gains entirely, as exports of both non-manufactured goods (primarily agricultural produce and raw materials) and re-exports were down year-over-year.

Manufactured goods exports totaled $1.46 billion in December, up 27.3% from last year. Non-manufactured goods and re-exports were down by 18.8% and 4.6% respectively.

For the year 2014, the value of Oregon’s exports increased by 12.2% over the prior year, which was significantly higher than the 1.4% increase from 2012 to 2013.

Exports of goods in the nation overall were up by only 2.8% for 2014.

“Given the slowing global economy and the lackluster growth for U.S. exports, Oregon’s strong performance in 2014 highlights the state’s role as one of the leading exporters in the country,” the analysts said.

On the import side, oil has been a significant issue as prices have plummeted over the last six months, due in large part to a surge in U.S. crude production, which has generated a surplus of international oil stocks. That has decreased U.S. dependence on foreign oil recently – ultimately a good thing for the national economy, as imports are a drag on GDP (gross domestic product) growth.

The average weekly volume of crude oil imports has steadily trended lower and at the end of January was 7.4 million barrels, down significantly from the recent peak of over 10 million barrels in 2006.

That comes as U.S. crude production trends higher. Data from the U.S. Energy Information Administration show domestic production reached 280 million barrels in October 2014, one of the highest monthly production volumes since October 1973. If oil prices remain at their current low level, expect high cost producers in the U.S. to trim back production.

A Closer Look At The Numbers
Beacon Economics cautions against reading too much into month-to-month fluctuations in state export statistics, Significant variations may occur as the result of unusual developments or exceptional one-off trades and may not be indicative of underlying trends.

For that reason, Beacon Economics also compares the latest three months for which data are available (i.e., October–December) with the corresponding period one year earlier.

That analysis shows that Oregon’s merchandise exports totaled $5.58 billion, a 13% nominal increase over the same three-month period last year. After adjusting for prices changes the state’s real export growth actually increased by 19.4%.

Though global growth may be slowing, demand for high tech goods from Oregon has not. During the October-December period the value of computer and electronic product exports increased by 21.2% year-over-year, which was up from the already impressive 18% increase reported last month.

Export growth during the latest three-month period was also boosted by strong performance in shipments of transportation equipment and non-electrical machinery, which increased by 68.6% and 21.6%, respectively.

The strong growth in transportation equipment exports is due to shipments of Ford Motor vehicles to China through Oregon ports over this last year. The main drag on overall trade growth during the latest three-month period came from agricultural and manufactured food products, which declined by 6.2% and 18.8%, respectively.

On a regional basis, Asia continued to fuel growth in the state’s export trade, with China and Malaysia being the primary export markets. As the No. 1 destination for goods shipped from Oregon, China remains the top contributor to growth as the value of exports headed there increased by 31.4%. Exports to Malaysia surged during the October-December period due to a 68.3% increases in exports of semiconductors.

Japan was the largest detractor from overall growth as that country continues to struggle with stagnant economic growth. The value of shipments to Japan was down by 10.8% in the latest three-month period over the same time last year. Exports to Canada, Oregon’s number two trading partner, also held back growth and contracted by 1.8%.