According to the latest numbers on international trade released by the World Trade Organization, in the first 10 months of 2015 the value of world merchandise exports plunged $1.6 trillion, or 11.2 percent, to $12.7 trillion from the same period in 2014.
WTO’s trade statistics on exports from January-October 2015 show the United States ranked as the second-largest exporter in the world, with foreign sales hitting $1.27 trillion, which represents a drop of $91 billion, or a 6.7 percent decline, from the first 10 months of 2014.
China was the world’s leading exporter selling abroad $1.86 trillion worth of exports so far in 2015, a 2.5 percent decline from the same period in 2014.
Germany, the export engine of the European Union, maintained its third place, posting $1.12 trillion in foreign sales in 2015, after an 11.6 percent plunge from 2014.
Japan was ranked the world’s fourth exporter, selling abroad $524 billion of merchandise through the first 10 months of 2015, after a decline of 9.5 percent from 2014.
The four-country combined value of exports accounted for 38 percent of all exports in the world in the first 10 months of 2015.
Looking at the state level, the latest export numbers show foreign sales from Michigan exporting companies leaped 7.3 percent in October, following a decrease of 5 percent in September. As a result, $4.5 billion worth of goods left Michigan going to international markets in October.
The state export numbers are adjusted for seasonal variation to bring them in line with the national trade numbers — a statistical process that smoothes out monthly fluctuations for factors such as the number of days in a month and holidays, thus truly providing a clear picture of monthly performance similar to the national numbers.
On an annual basis, October’s statistics indicate local exporters posted gains from the economic conditions in the countries where foreigners’ demand for goods made in Michigan is generated. In October, exporting companies sold $72.8 million, or 1.6 percent, more goods than in October 2014.
Exports of manufactured goods — an important contributor to overall economic development and a generator of export-related jobs — accounted for 84 percent of all state exports in October. Shipments abroad from state factories increased in October by 7.4 percent from the previous month to $3.79 billion, adjusted for seasonal variation.
How do Michigan manufacturers compare to their performance a year ago? October’s foreign shipments from state manufacturing companies were $85.6 million, or 2.3 percent, higher than in October 2014.
Exports of non-manufactured goods went up 6.8 percent in October to $711.4 million, adjusted for seasonality. This group of shipments abroad consists of agricultural goods, mining products and re-exports, which are foreign goods that entered the state as imports and are exported in substantially the same condition as when imported.
For the country as a whole, America’s exports of goods, seasonally adjusted, fell in October by 2.5 percent to $123.8 billion, the lowest monthly level since June 2011.
Looking at export growth through the first 10 months of 2015 — a gauge of the state’s success in penetrating international markets — Michigan ranked 27th among states. Compared to the same period in 2014, foreign sales from Michigan's companies, seasonally adjusted, decreased by an annual rate of 5.5 percent. During that same time period, national exports of goods fell 6.6 percent, which is the 50-state average growth rate.
What is the outlook for Michigan exports in 2016? According to the latest business survey, conducted by the Institute of Supply Management, the nation’s supply executives are not optimistic about the prospects of growing overseas shipments in early 2016. The Tempe-based research institute reported that its export orders index shows a contraction in November for the sixth consecutive month.
The latest reading also indicates new export orders in November were falling at the same speed as in October. This is not good news for Michigan's exporting companies because less incoming export orders imply lower production and less export-related jobs in the future.
From the pool of respondents of the largest U.S. corporations that sell their products overseas, only 9 percent reported greater new export orders from October's levels, 77 percent reported no change in new export orders and 14 percent reported smaller new export orders.
Evangelos Simos is chief economic adviser of the consulting and research firm e−forecasting.com. He can be reached at eosimos@e-forecasting.com.
