Oregon’s 2014 exports on track to set record

In the latest numbers, Oregon’s export trade maintained its trend of strong growth and the state is on course to have its best export year ever, according to a Beacon Economics ‘ analysis of foreign trade data released Friday by the U.S. Commerce Department.

Oregon’s export trade totaled $1.87 billion in October, an 11.8% nominal increase over the same month one year prior. This was sharply higher than the 2.2% increase in trade value for the U.S. overall.

October’s increase in Oregon’s export trade may be slightly slower than the 13.2% year-over-year increase in September, but nevertheless represents continued strong growth in export values. Beacon Economics’ estimates trade prices in the state decreased by 5.1%, meaning that the state’s exports increased by 17.9% after adjusting for inflation.

“The health of the global economy has been steadily worsening over the last year, yet the exports produced by Oregon are on pace to hit a new record this year,” said Christopher Thornberg, Founding Partner of Beacon Economics .

Thornberg went on to note that one result of the recent recession was a sharp depreciation of the U.S. dollar and a corporate sector that has focused on efficiency since growth was not much of an option over the last few years.

“These things have meant that U.S. exporters can compete even in the midst of a weak global economy,” he said. “And if you add in the world class firms that call Oregon home, we can see why the state has managed to buck the trend.”

The value of Oregon’s manufactured goods exports in October was $1.37 billion, up 11.5% from the same time one year earlier and was an acceleration over the 9.8% year-over-year increase last month.

Exports of non-manufactured goods (chiefly agricultural produce and raw materials) extended the annual declines from last month and totaled $291.5 million, down 5.6% from last October. Re-exports continued the previous month’s strong increase and surged 53.3% year-over-year to $215.4 million.

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., August–October) with the corresponding period one year earlier. That analysis shows Oregon’s merchandise exports totaled $5.34 billion, a nominal increase of 12.1%, up from the 11.7% year-over-year increase during the July-September period and also much stronger than the 3.4% growth in the U.S. overall during the same time period.

After adjusting for inflation, the state’s real export growth during the latest three months increased by 16.0% over the same time one year prior due to a 3.3% decline in Beacon Economics’ trade price index for Oregon.

Oregon’s strong results are not indicative of what is happening in the U.S. overall, where year-to-date growth is less than 3%.

“The good news is that the domestic U.S. economy continues to expand despite weaker numbers abroad, as attested to by the sharp increase in jobs we have seen over the last few months,” said Thornberg. “But this also means that the U.S. dollar will continue to rise as investors expect the Federal Reserve to start tightening before other major central banks. Because of this we expect exports will be less of a driver of growth for at least the next year.”

A Closer Look At The Numbers

Computer and electronic product exports made the largest contribution to overall export growth in the August-October period and increased by $252.97 million to $2.11 billion, a 13.7% increase over the same period one year ago. The strong growth in export values for this category was due primarily to a surge in semiconductor exports to Malaysia which totaled $382.81 million during the three-month period, up $185.58 or 92.1% from last year.

Transportation equipment exports continued the strong trend they have been on for most of this year, which is due primarily to the Auto Warehousing Co., which has been shipping Ford Motor vehicles to China through Oregon ports since last year. The total value of Transportation equipment exports was $448.23 million for the August-October period, up 57.6% from the same time last year.

Agricultural products and non-electrical machinery, the number two and three export commodities by dollar value, also made solid contributions to overall export growth, increasing by 13.7% and 24.6%, respectively, over the same three-month period last year. Chemical products rounded out the top five export categories during the three-month period but were a drag on overall growth as export values declined by 7.8% year-over-year.

China remained the No. 1 export destination for Oregon’s goods by a large margin. For the August-October period, exports to China surged 44.5% from $0.81 billion last year to $1.17 billion this year – a slight acceleration over the strong 41.2% annual increase during the prior three-month period. Oregon exports to China represented 21.8% of total export value during the latest three-month period, much higher than the 14.9% share for Canada, the second largest export destination.

Export to Malaysia and South Korea, the third- and fifth-largest export destinations, contributed to the strong growth in export trade as well and increased by 46.2% and 24.1%, respectively, from the same three-month period one year ago. This was an improvement over the already solid performance during the prior three-month period when exports to these destinations increased by 42.5% and 12.5%, respectively.

Exports to Canada, the second-largest export destination, continued to decline during the latest three-month period. Totaling $796.91 million, exports to Canada were 7.2% lower than during the same time period last year.

This year-over-year decline came on top of the 4.5% decrease in the July-September period. Exports to Japan, the fourth largest export destination, were also a drag on overall trade growth and decreased by 8.4% from the same period last year. This was a reversal of the 10.1% increase seen during the July-September period.