The value of international trade passing through the California's three customs districts was up during February, with a big boost from exports. At the Los Angeles Customs District, export values were up by 20.0% over the year to February, while imports moved ahead by 2.5%. Total trade value at Los Angeles rose by 7.4% in February to $27.4 billion. The two month trade value increased by 9.2% over the comparable 2007 period to $55.3 billion.
At the San Francisco Customs District, export values were up by 12.0% in February, and import values showed some life with a 10.6% gain over the year. Total two-way trade value increased by 11.2% during the month to $9.2 billion. The two-month total rose by 7.7% over the comparable 2007 period to $18.4 billion.
At the San Diego Customs District, February export values were up by 9.8%, while import values recorded a 5.4% gain. The total for the month was up by 6.4% to $4.2 billion. The two month value rose by 4.7% to $8.5 billion. (Jack Kyser)
February export figures released by the Census Bureau showed that Texas edged out California for the second consecutive month as the nation's leader in total exports. Using the U.S. Principal Parties of Interest (USPPI) measurement, Texas exports totaled $12.21 billion (a year-over-year increase of +31.6%) ahead of California's $12.02 billion (+17.4% year-over-year) in the month of February. Nationally, exports increased by +24.7% when compared to February 2007. California ($8.58 billion) exported +17.5% more manufactured goods compared to a year earlier, while Texas ($10.19 billion) saw a +35.3% increase.
Using the Origin of Movement (OM) series, Texas again led the nation in February with a record high $15.53 billion in total exports, a year-over-year increase of +61.3%. During that same period, California saw its total exports increase by an equally impressive +60.7 % to $11.12 billion. These dramatic increases are reflected in the nation's overall increase in total exports which reached almost $106 billion in February, a +59.9% increase from last year. California's exports of manufactured goods increased by +16.4% year-over-year to $8.2 billion, while Texas increased their export of manufactured goods by +33.5% to $12.9 billion. Nationally, U.S. exports of manufactured goods were up by +23.2% to $81.6 billion. California's export growth in manufactured goods as measured by OM was led by motor vehicles and telecommunications equipment.
Growth in the export of non-manufactured goods continues to outpace growth of manufactured goods both nationally and at the state level. In terms of USSPI, California still maintained its lead over Texas in the export of non-manufactured goods ($1.4 billion to $820.3 million). However, Texas exceeded California in terms of percentage growth over the last 12 months (+39.7% to +21.2%). Using the OM measurement of exports, California's export of non-manufactured goods increased over the last year by 35.0% (to $1.2 billion) while Texas' exports of non-manufactured goods increased by 62.8% (to $1.1 billion) over the same period. Refined oil products were the largest component of growth for non-manufactured goods exports in both California and Texas in OM terms. Milk and wheat exports were the agricultural products with the largest contribution to the year-over-year increase in non-manufactured goods exports for California and Texas respectively.
The USPPI measure allocates export trade value according to the location of companies having the greatest economic interest in an international transaction, while OM measures trade values at the point where international shipments begin, often at consolidation points near border crossings or other ports of exit. With its long border with Mexico, Texas is home to numerous international border crossings and warehousing facilities, as well as major rail links between the United States and Mexico. Industry observers believe that many shipments originating in other states (including California) are credited with Texas exports to Mexico under the OM state export series. (Eduardo J. Martinez and April Lisonbee)
State export (OM): http://www.census.gov/foreign-trade/Press-Release/current_press_release/exh2s.txt
State export (USSPI): http://www.census.gov/foreign-trade/statistics/state/zip/index.html
PR: http://www.bls.gov/news.release/pdf/empsit.pdf
The State Controller just released the latest financial results for the General Fund, covering the first nine months of fiscal (FY) 2007-2008, which began on July 1st, 2007. Compared to the first nine months of FY2006-2007, total receipts have increased by 8.8% to $69.6 billion, while total disbursements grew by 3.0% to $87.1 billion. With spending outpacing revenues, the General Fund ran a deficit of -$17.6 billion over the nine-month period. Still, this was better than the deficit of -$20.6 billion registered during the first nine months of the previous fiscal year.
This year's -$17.6 billion shortfall was covered in three ways. (1) The General Fund's cash balance ($2.5 billion as of July 1, 2007) has been drawn down to zero. (2) The State of California borrowed $7.0 billion in November by selling Revenue Anticipation Notes. (3) "Internal borrowing" of $8.1 billion; i.e., dollars were transferred from some accounts in the General Fund to others.
Some other interesting details from the Controller's report: (1) Revenue from the big three tax sources—corporation, income and sales & use taxes—increased by only +0.6% (+$368,000) over the previous year, slower than the 3.3% growth pace of the first nine months of FY2006-07. (2) Corporation tax revenues have dropped by -8.1% (-$573,000) compared to last year, while retail sales and use tax revenues were down by -$441,000 (-2.2%), mostly due to the drop in new homebuilding and slower automotive sales. (3) On the spending side, Local K-12 Education has received $30.9 billion so far, an increase of just $115,000 (+0.4%) over same period of the previous fiscal year. However, contributions to the State Teachers' Retirement System (CALSTRS) grew by $659,000, and spending for other local educational purposes rose by $1.43 million. (4) Spending for State Operations was up by $1.01 million, or 5.1%. The biggest dollar increase was $380,000 for the Department of Corrections followed by debt service, which has risen by $276,000.
The California General Fund typically runs deficits in the first nine months of the fiscal year. Earlier estimates prepared to support the Governor's FY2008-09 budget (which was released in January, 2008) anticipated a budget shortfall of -$19.69 billion; so the year-to-date deficit was actually $2.13 billion better than expected. However, the trends observed to date are not comforting. Revenues have come in -1.3% (or -$819,000) below budget estimates. Most observers expect revenue growth to deteriorate further along with the slowing economy. Some difficult decisions lie ahead in Sacramento. (Nancy D. Sidhu)
PR: http://www.bls.gov/news.release/pdf/empsit.pdf
The U.S. Census Bureau reported that total U.S. wholesale sales for merchant wholesalers edged down to $377.4 billion (SA) in February, -0.8% less than the revised January value of $380.2 billion. However, February's value was up by +12.2% over the year from the revised February 2007 value of $336.3 billion. Substantial gains in farm products and petroleum reflected higher prices for those goods compared with last year.
Durable goods sales were down by -1.7% from January, but they were up by +3.6% over the year. Once again, the largest increase came in machinery sales, which soared to $30.1 billion in February, up by +13.9% over the year. Lumber sales posted the largest decline year over year, falling by -12.9%. The automotive industry also continued to slip, falling by -1.9% from January and by -3.6% from February 2007.
Nondurable goods were flat over the month, with $206.8 billion in sales, a mere +0.1% increase from January. However, they were up by a stout +20.5% from February 2007. Farm products edged lower in February, down by -4.4%, following a large increase the previous month (+14.3%). Still, they were up by a staggering +59.6% over the year, reflecting higher prices seen over the past several months. Groceries posted a decrease over the month as well, with a -1.1% decline from the previous month but were up considerably (by +8.6%) over the past year. Petroleum sales continued to increase, rising by +2.6% from January and by +48.9% from February 2007.
Total wholesale inventories rose to $421.9 in February, a gain of +1.1% over the previous month and up by +7.4% from February 2007. Durable goods inventories rose by +0.7% in February and by +2.5% from a year ago, led by automotive and furniture, which were up over the year by +5.8% and +5.2%, respectively. Nondurable goods inventories increased as well, rising by +1.8% from the previous month and by +16.2% from a year ago. The increases in this sector were led once again by growth in farm products and petroleum inventories, which were up over the year by +72.5% and +27.7%, respectively.
The wholesale industry's February inventories/sales ratio remained low at 1.12, compared with 1.17 during February 2007. The automotive inventory levels remain a bit high relative to sales with I/S ratio of 1.51 (the highest since April 2006). ; Thus, a further downward correction is likely for this industry. Overall, the U.S. wholesale stock-to-sales ratio remains low, as firms are still hesitant to raise inventories due to continued concerns about weaker sales ahead. (Candice Flor Hynek)
PR: http://www.census.gov/wholesale/pdf/mwts/currentwhl.pdf
The Bureau of Transportation Statistics (BTS) reported that the Freight Transportation Services Index (TSI) stood at 111.5 (seasonally adjusted), exactly the same as the previous month and up by +2.7% from February 2007. The Freight TSI measures the output services provided by for-hire transportation in trucking, rail, inland waterways, pipelines, and air freight. The current reading was down by -1.5% from its peak of 113.1 in November 2005. (Candice Flor Hynek)
PR: http://www.bts.gov/press_releases/2008/bts016_08/pdf/bts016_08.pdf
Thursday, April 17
Housing Market Cycles with John Burns
11:30 a.m. at the Downtown Los Angeles Marriott.
The Los Angeles Chapter of the National Association for Business Economics (NABE) presents "Housing Market Cycles" with John Burns. Mr. Burns consults to numerous builders and others in the real-estate industry throughout the United States. He will offer his latest observations on the state of the economy and housing market. The luncheon is on Thursday, April 17th at the Downtown Los Angeles Marriott. To register and for more information, please visit www.lanabe.org.
Thursday, May 8
2008 San Fernando Valley Economic Summit
7:30 a.m. - 1 p.m. at the Sheraton Universal Hotel.
Featuring National Economic Overview, Economic Trend & Opportunities, and Valley Economic & Real Estate Report.
Register: Wednesday, May 14
International Trade Outlook
Breakfast & Networking: 8:00 a.m. - 8:30 a.m. Program: 8:30 a.m. - 10:00 a.m. At Keesal, Young and Logan – Long Beach.
Foreign Direct Investment is a major contributor to LA County's economy. Join us to preview this special report on FDI along with the International Trade Outlook report highlights. For more information and sponsorship opportunities, please contact Eydie Galper (213) 236-4828 or e-mail: eydie.galper@laedc.org.
The Economic Data Global Express (e-EDGE) is a free service of the Los Angeles County Economic Development Corporation (LAEDC). Permission to quote any proprietary part of this release is granted given proper credit. Distribution is allowed provided that no modifications are made to the original content. Sponsors of this service do not necessarily endorse all opinions stated herein. For more information, please e-mail to research@laedc.org. To contact LAEDC, please call 213-622-4300.
Subscribe to e-EDGE and receive current economic news and major developments. Your e-mail address will not be disclosed to any outside party (including e-EDGE sponsors) under any circumstances.
To send us comments regarding e-EDGE, please e-mail to research@laedc.org.