COVID-19 RESOURCES AND INFORMATION: See the Atlanta Fed's list of publications, information, and resources for help navigating through these uncertain times. Also listen to our special Pandemic Response webinar series.

Economy Matters logo

About


The Atlanta Fed's SouthPoint offers commentary and observations on various aspects of the region's economy.

The blog's authors include staff from the Atlanta Fed's Regional Economic Information Network and Public Affairs Department.

Postings are weekly.


September 23, 2014

Southeastern Exports Taking Large Strides

Two years ago, I wrote an overview of merchandise (goods and commodities) exports by the Sixth District's major cities. The overview was based on the 2011 metropolitan statistical area (MSAs) export data produced by the U.S. Department of Commerce. Back then, five MSAs in the District made it to the list of top-50 U.S. metropolitan export markets: Miami-Fort Lauderdale-Pompano Beach, New Orleans-Metairie-Kenner, Atlanta-Sandy Springs-Marietta, Tampa-St. Petersburg-Clearwater, and Nashville-Davison-Murfreesboro-Franklin. Earlier this month, the Commerce Department released the U.S. metropolitan exports report updated with 2013 data. According to the report, three more MSAs from the Sixth District now rank among the top 50: Louisiana's Baton Rouge and Lake Charles, and East Tennessee's Kingsport-Bristol. In 2013, the eight MSAs exported more than $124 billion worth of goods and commodities, accounting for nearly 9 percent of total merchandise exports by U.S. MSAs, up from 7 percent just two years earlier.

The Commerce Department has also published merchandise export fact sheets for each of the top 50 exporting MSAs. These fact sheets provide details on the metropolitan areas' exports, including product types, major export destinations, small-medium business share of total exports, and so on. It's a great way to learn more about each city's connectedness to the global economy. The information is drawn from the U.S. Census Bureau's Origin of Movement–Zip Code Based Series, which allocates exports to states and localities based on the address of the legal entity (such as a manufacturer) that receives the benefit from the export transaction.

Here are a few observations on the rising prominence of exports in the Sixth District. First, the data show the rapid evolution of MSAs in southern Louisiana and Mississippi into key export markets. Since 2009, Lake Charles, for example, saw its exports increase by more than 300 percent, and New Orleans by nearly 200 percent. But those impressive growth rates are just baby steps compared to Gulfport-Biloxi-Pascagoula's leap of almost 600 percent—the fastest growth among metro areas that exported more than $1 billion in 2013. The common driver of that growth is rising production and exports of refined petroleum and coal products in the United States. Nationwide, export volume of petroleum products jumped almost 70 percent between 2009 and 2013. Since prices of those products also went up during that time, the value of exported petroleum products soared 180 percent.

Another development worth highlighting is last year's rapid increase in exports of transportation equipment and machinery from the nation's top exporting MSAs. The 36 percent ($2.3 billion) jump in the Nashville metro area's merchandise exports last year illustrates the trend. The strong growth has put the city among top 10 metropolitan areas that saw the biggest dollar increase in merchandise exports in 2013. And another fact: exports from Kingsport and Savannah grew by higher dollar amounts ($1.5 billion and $1.3 billion, respectively) than exports from the export heavyweight Los Angeles.

The Kingsport-Savannah-Los Angeles comparison, however, might give a wrong impression about the magnitude of change of those cities' role in international trade. The problem is that the MSA export data only capture exports of goods and commodities, omitting the big share (about 30 percent) of U.S. exports accounted for by the services industry (which includes, for example, tourism, patents, and entertainment). I wonder what types of changes are taking place in the services industry exports and how they may be affecting Sixth District cities' ties to the global economy. If you have any insights, please share!


Photo of Galina AlexeenkoBy Galina Alexeenko, a Regional Economic Information Network director in the Atlanta Fed's Nashville Branch

May 1, 2014

Will 2014 Be a Tipping Point for Logistics?

The Atlanta Fed’s Trade and Transportation Advisory Council convened in early April in Jacksonville, Florida. Overall, the tone was encouraging compared with last year’s September meeting, when members reported decelerating activity during the summer. This time, a majority reported expanding activity during the fourth quarter and into 2014, despite the impact of unseasonably harsh winter weather. Additionally, the expectation for demand over the short term is for continued growth at a slightly higher pace.

District port contacts were upbeat, citing a rise in energy exports, steel imports, and higher container volumes. Trucking companies reported very strong freight volumes, which appears to them as real demand and not just a rebound from severe winter weather. It is important to note that the industry continues to operate with about 20 percent less capacity than prerecession levels, and capacity constraints are beginning to limit the movement of goods on highways.

Similar to past years, the railroad industry continues to see modest gains in intermodal traffic and shipments of grain and industrial equipment. Construction products were down slightly, along with significant declines in export coal. In air cargo, revenues are reportedly back to 2007 levels, albeit with only slightly higher air freight volumes boosted by international activity and sharp declines in domestic cargo.

Employment and pricing
Council members indicated employment levels remained stable, with no anticipated increase in staffing levels over the short term. In trucking, struggles to find drivers continue, and regulations have eliminated between 2 percent and 4 percent of drivers and have also reduced the number of hours and miles allowed for drivers. Hiring diesel mechanics has also become a challenge.

Besides the trucking industry, which has steadily been increasing driver pay, council members generally reported no significant upward pressure on labor costs, outside of cost increases for health insurance. As a result of capacity constraints, however, trucking companies project carrier rate increases of between 4 percent and 6 percent, on average, in both the near and longer term as supply and demand dictate. These capacity constraints are creating opportunities for rail carriers, who are seeing more pricing power as well.

International trade
In terms of growth rates of the value of air cargo, regions that should drive demand for U.S. exports include the Middle East, driven by Gulf countries, the United Arab Emirates, Saudi Arabia, and Israel; Asia (specifically China, Hong Kong, and Singapore); Europe, concentrated in areas in Western and Eastern Europe recovering from or not affected by euro zone issues; and Latin America and the Caribbean (and mostly Brazil). Air trade activity should remain flat.

District ports expect cargo volumes in 2014 to grow by up to 5 percent with strong increases in imports while exports will grow more slowly. Asia will remain a primary market for food exports from the United States, and some regions of Africa (chiefly in the western and southern areas) will be target markets for U.S. exporters as the demand for oil, gas, and food products increases.

Geopolitical concerns present potential downside risks for trade flows, and labor issues at West Coast ports could interrupt trans-Pacific trade. Congested and outdated highways, combined with a shortage of truckers, will eventually hamper the inland movement of goods. For example, the lack of funding for dredging or for antiquated lock systems at District inland ports and seaports could stunt growth.

In the near future
Overall, our Trade and Transportation Advisory Council members were upbeat and see two related tipping points approaching. First, prices are on the verge of increasing more rapidly as businesses are forced to pay more as freight charges, especially for trucking and rail, increase. Second, capacity constraints might suppress growth as demand-side bottlenecks in the movement of goods become more frequent.

By Sarah Arteaga, a Regional Economic Information Network director in the Atlanta Fed's Jacksonville Branch


March 14, 2013

The Sixth District’s Exports to the European Union

The European debt crisis erupted at the end of 2009, after Greece revealed that its government finances were in very bad shape. Stresses in the financial markets, brought on by investor concerns about Greece’s and other European governments’ ability to pay their debts—as well as worries about the banking system—were quickly transmitted to Europe’s economy.

Real gross domestic product in the 27-country European Union (17 countries within that political bloc use the euro as a common currency) began to fall in the fourth quarter of 2011. At the time, a SouthPoint post looked at what the European crisis might mean for the Southeast, given the region’s trade connections with Europe. The conclusion was that Sixth District’s economy was not immune to European problems. Later, in early 2012, a SouthPoint post sifted through the U.S. International Trade Administration’s (ITA) data to determine which District’s states would be more vulnerable to the contracting EU economy.

The recently released ITA state merchandise exports data for 2012 now allow us to quantify how resilient the District’s exporters were to the European crisis last year.

First, let’s put the Southeast data in the national context. In 2012, U.S. merchandise export growth decelerated substantially, to 4 percent from 16 percent in 2011. (Part of the deceleration can be attributed to changes in prices—according to the U.S. Bureau of Labor Statistics, export prices grew 8 percent in 2011 and were virtually unchanged last year.) U.S. exports to the European Union fell 1 percent last year (to $265 billion)—a marked change from the 12 percent growth in 2011. Chemicals (led by pharmaceuticals), transportation equipment (mostly aerospace-related), computer and electronic products, and industrial machinery are the top four U.S. merchandise exports to Europe. Within those categories, growth in exports of pharmaceuticals held up pretty well last year, sales of transportation equipment were mostly unchanged, while U.S. exports to Europe of basic chemicals, semiconductors, and some types of machinery saw notable declines.

As it turns out, the Sixth District did better than the United States as a whole. Exports to the European Union increased 4 percent last year. All the Sixth District states except Mississippi are among the top 20 states that export to the European Union, and only Florida saw its exports to Europe shrink last year. Louisiana’s exports increased 15 percent and Alabama’s rose 8 percent, while sales to Europe were essentially unchanged last year for Georgia, Tennessee and Mississippi.

Looking into the industry mix—which products Europe imports from each state—can help explain the varying export performance across the District. (Another big factor, of course, is the countries within the EU to which states sell their products.)

Let’s start by looking at Louisiana—not only the state where exports to Europe grew at the fastest rate in the District last year, but also the nation’s fifth-largest exporter to the European Union. Louisiana’s biggest export to Europe, as to the rest of the world, is petroleum and coal products. These products accounted for about two-thirds of last year’s growth in the state’s exports to Europe. Most of the rest of that growth came from a 47 percent jump in exports of agricultural products, largely grains and oilseeds.

The industry mix is very different for Alabama, where exports to Europe also grew in 2012. Most of the growth was driven by a 43 percent increase in sales of transportation equipment. For most other industries in Alabama, sales also changed at double-digit rates—both up and down. There was little inching up or edging down; it was more like soaring or plummeting. Chemicals and paper—the state’s two other big exports to Europe—fell by about 25 percent, exports of fabricated metal products rose nearly 60 percent, and Alabama’s sales of wood products to Europe increased more than 80 percent.

Exports of wood products to Europe did even better in Georgia, growing by nearly 500 percent last year to $81 million. As Tom Cunningham—the Atlanta Fed’s regional executive for Georgia—explains, the European Union (and in particular, Germany) is increasingly relying on renewable energy, and there’s been a huge surge in taking Georgia’s readily available pine, pelletizing it, and shipping it off to be burned in Europe. This appears to be a common theme in the South Georgia pine regions. But pellets are still a niche export. Georgia’s total exports to Europe did not grow last year, mostly because the state’s sales of transportation equipment—Georgia’s largest export to the European Union—fell 10 percent.

Growth in exports to Europe also stalled in Tennessee last year. While many of the state’s industries faced a decline in demand from across the Atlantic, total exports to Europe held up because of 15 percent growth in sales of computer and electronic products. Tennessee’s second-largest export to Europe—medical supplies and equipment—also grew, albeit at a much more modest 2 percent.

Similar to Tennessee, but on a much smaller scale, Mississippi’s exports to Europe were boosted by sales of computer equipment and medical supplies and equipment. The aerospace industry also did very well in terms of sales to Europe. However, because of big declines in exports of chemicals and paper, Mississippi’s exports to Europe were essentially the same as in 2011.

While computer and electronics industry fared well in Tennessee and Mississippi, Florida was one of the worst hit in terms of exports to Europe. That industry is the state’s second-largest exporter to Europe, so a 23 percent decline in those exports accounted for a big part of the 7 percent drop in Florida’s total exports to the European Union.

Overall, the Sixth District’s exporters to Europe showed resilience last year, benefiting from the continent’s demand for our energy and agricultural products, certain types of electronic products and medical supplies, as well as a notable increase in prices for some of those products. Still, as European economy stabilizes in 2013, let’s hope for a better year for our exporters.

Photo of Galina AlexeenkoBy Galina Alexeenko, director of the Regional Economic Information Network for the Atlanta Fed’s Nashville Branch

September 24, 2012

Exports from U.S. Metropolitan Areas

The U.S. economy is famous for being consumer focused, with personal consumption expenditures accounting for about 70 percent of the country's gross domestic product (GDP). Compared with other economies, it is also a fairly closed one—exports' share of GDP is only about 13 percent. For many Americans, the phrase "international trade" is synonymous with "trade deficit" since the country for decades has imported more than it sold abroad. And although the aforementioned facts are perfectly true, they are masking an important and growing phenomenon—the U.S. economy's increasing reliance on foreign demand. So here's another fact: exports have become a potent engine of the current economic recovery, having contributed 45 percent to U.S. GDP growth since the end of the last recession—more than in any recent economic recovery.

Last year, the United States exported about $2.1 trillion in goods and services. Exports of services, such as consulting and other business services, accounted for about 30 percent of U.S. exports. (The United States is the largest exporter of services in the world.) The rest—about $1.5 trillion—were U.S.-made goods, industrial materials, and agricultural products, also known as "merchandise exports." Last week, the U.S. Department of Commerce released the report that showed a breakdown of U.S. merchandise exports by U.S. metropolitan areas for 2011. The report is based on the U.S. Census Bureau's Origin of Movement–ZIP code Based Series, which allocates exports to states and localities based on the address of the legal entity, such as a manufacturer, that receives the benefit from the export transaction.

The data for merchandise exports are now available for the 367 metropolitan statistical areas (MSAs), although the value of those exports is concentrated in the top MSAs. In the Sixth District, five MSAs showed up on the top-50 list: Miami-Fort Lauderdale-Pompano Beach (#5), New Orleans-Metairie-Kenner (#15), Atlanta-Sandy Springs-Marietta (#18), Tampa-St. Petersburg-Clearwater (#38), and Nashville-Davidson-Murfreesboro-Franklin (#45). Together, just these District MSAs alone accounted for about 7 percent of the country's merchandise exports last year.

The Miami metropolitan area is by far the largest exporter in the District. In 2011, it exported $43 billion worth of merchandise, accounting for two-thirds of Florida's merchandise exports. Miami's exports are dominated by computer and communications equipment and are shipped mainly to Latin America. For Florida's second-largest exporter, the Tampa metropolitan area, computer and electronic products were also the dominant export, but Tampa's export destinations were a bit more diversified across continents—in addition to Latin America, a big share of Tampa's exports sold in Canada, India, and China. Miami and Tampa are also big exporters of transportation equipment.

The Sixth District's second-largest exporter, the New Orleans metropolitan area, stood out in 2011 as the metropolitan area that recorded the highest exports growth in 2011 among the top 25 metropolitan exporters. Exports from New Orleans soared more than 45 percent between 2010 and 2011, boosted to a large degree by higher shipments of petroleum products. Top export destinations for the New Orleans area last year were Japan, China, Mexico, Singapore, and the Netherlands.

Somewhat surprisingly, Singapore—a small city-state—is also the third-largest export destination (our neighbors in North America took the first and second place) for goods produced in the Atlanta metropolitan area—my former hometown. Atlanta's exports are concentrated in transportation equipment and machinery. And finally, the Nashville metropolitan area (which happens to be my new hometown), which is known for its auto industry, relies on exports of transportation equipment, as autos and parts follow the NAFTA supply chains.

Overall, the latest MSA export data clearly show that a lot of products made, extracted, or grown in the Sixth District's largest MSAs end up in foreign countries. So, no wonder the latest slowdown in global growth has become a concern for many of the region's businesses.

Photo of Galina AlexeenkoBy Galina Alexeenko, director of the Regional Economic Information Network at the Atlanta Fed's Nashville Branch


September 23, 2014

Southeastern Exports Taking Large Strides

Two years ago, I wrote an overview of merchandise (goods and commodities) exports by the Sixth District's major cities. The overview was based on the 2011 metropolitan statistical area (MSAs) export data produced by the U.S. Department of Commerce. Back then, five MSAs in the District made it to the list of top-50 U.S. metropolitan export markets: Miami-Fort Lauderdale-Pompano Beach, New Orleans-Metairie-Kenner, Atlanta-Sandy Springs-Marietta, Tampa-St. Petersburg-Clearwater, and Nashville-Davison-Murfreesboro-Franklin. Earlier this month, the Commerce Department released the U.S. metropolitan exports report updated with 2013 data. According to the report, three more MSAs from the Sixth District now rank among the top 50: Louisiana's Baton Rouge and Lake Charles, and East Tennessee's Kingsport-Bristol. In 2013, the eight MSAs exported more than $124 billion worth of goods and commodities, accounting for nearly 9 percent of total merchandise exports by U.S. MSAs, up from 7 percent just two years earlier.

The Commerce Department has also published merchandise export fact sheets for each of the top 50 exporting MSAs. These fact sheets provide details on the metropolitan areas' exports, including product types, major export destinations, small-medium business share of total exports, and so on. It's a great way to learn more about each city's connectedness to the global economy. The information is drawn from the U.S. Census Bureau's Origin of Movement–Zip Code Based Series, which allocates exports to states and localities based on the address of the legal entity (such as a manufacturer) that receives the benefit from the export transaction.

Here are a few observations on the rising prominence of exports in the Sixth District. First, the data show the rapid evolution of MSAs in southern Louisiana and Mississippi into key export markets. Since 2009, Lake Charles, for example, saw its exports increase by more than 300 percent, and New Orleans by nearly 200 percent. But those impressive growth rates are just baby steps compared to Gulfport-Biloxi-Pascagoula's leap of almost 600 percent—the fastest growth among metro areas that exported more than $1 billion in 2013. The common driver of that growth is rising production and exports of refined petroleum and coal products in the United States. Nationwide, export volume of petroleum products jumped almost 70 percent between 2009 and 2013. Since prices of those products also went up during that time, the value of exported petroleum products soared 180 percent.

Another development worth highlighting is last year's rapid increase in exports of transportation equipment and machinery from the nation's top exporting MSAs. The 36 percent ($2.3 billion) jump in the Nashville metro area's merchandise exports last year illustrates the trend. The strong growth has put the city among top 10 metropolitan areas that saw the biggest dollar increase in merchandise exports in 2013. And another fact: exports from Kingsport and Savannah grew by higher dollar amounts ($1.5 billion and $1.3 billion, respectively) than exports from the export heavyweight Los Angeles.

The Kingsport-Savannah-Los Angeles comparison, however, might give a wrong impression about the magnitude of change of those cities' role in international trade. The problem is that the MSA export data only capture exports of goods and commodities, omitting the big share (about 30 percent) of U.S. exports accounted for by the services industry (which includes, for example, tourism, patents, and entertainment). I wonder what types of changes are taking place in the services industry exports and how they may be affecting Sixth District cities' ties to the global economy. If you have any insights, please share!


Photo of Galina AlexeenkoBy Galina Alexeenko, a Regional Economic Information Network director in the Atlanta Fed's Nashville Branch

May 1, 2014

Will 2014 Be a Tipping Point for Logistics?

The Atlanta Fed’s Trade and Transportation Advisory Council convened in early April in Jacksonville, Florida. Overall, the tone was encouraging compared with last year’s September meeting, when members reported decelerating activity during the summer. This time, a majority reported expanding activity during the fourth quarter and into 2014, despite the impact of unseasonably harsh winter weather. Additionally, the expectation for demand over the short term is for continued growth at a slightly higher pace.

District port contacts were upbeat, citing a rise in energy exports, steel imports, and higher container volumes. Trucking companies reported very strong freight volumes, which appears to them as real demand and not just a rebound from severe winter weather. It is important to note that the industry continues to operate with about 20 percent less capacity than prerecession levels, and capacity constraints are beginning to limit the movement of goods on highways.

Similar to past years, the railroad industry continues to see modest gains in intermodal traffic and shipments of grain and industrial equipment. Construction products were down slightly, along with significant declines in export coal. In air cargo, revenues are reportedly back to 2007 levels, albeit with only slightly higher air freight volumes boosted by international activity and sharp declines in domestic cargo.

Employment and pricing
Council members indicated employment levels remained stable, with no anticipated increase in staffing levels over the short term. In trucking, struggles to find drivers continue, and regulations have eliminated between 2 percent and 4 percent of drivers and have also reduced the number of hours and miles allowed for drivers. Hiring diesel mechanics has also become a challenge.

Besides the trucking industry, which has steadily been increasing driver pay, council members generally reported no significant upward pressure on labor costs, outside of cost increases for health insurance. As a result of capacity constraints, however, trucking companies project carrier rate increases of between 4 percent and 6 percent, on average, in both the near and longer term as supply and demand dictate. These capacity constraints are creating opportunities for rail carriers, who are seeing more pricing power as well.

International trade
In terms of growth rates of the value of air cargo, regions that should drive demand for U.S. exports include the Middle East, driven by Gulf countries, the United Arab Emirates, Saudi Arabia, and Israel; Asia (specifically China, Hong Kong, and Singapore); Europe, concentrated in areas in Western and Eastern Europe recovering from or not affected by euro zone issues; and Latin America and the Caribbean (and mostly Brazil). Air trade activity should remain flat.

District ports expect cargo volumes in 2014 to grow by up to 5 percent with strong increases in imports while exports will grow more slowly. Asia will remain a primary market for food exports from the United States, and some regions of Africa (chiefly in the western and southern areas) will be target markets for U.S. exporters as the demand for oil, gas, and food products increases.

Geopolitical concerns present potential downside risks for trade flows, and labor issues at West Coast ports could interrupt trans-Pacific trade. Congested and outdated highways, combined with a shortage of truckers, will eventually hamper the inland movement of goods. For example, the lack of funding for dredging or for antiquated lock systems at District inland ports and seaports could stunt growth.

In the near future
Overall, our Trade and Transportation Advisory Council members were upbeat and see two related tipping points approaching. First, prices are on the verge of increasing more rapidly as businesses are forced to pay more as freight charges, especially for trucking and rail, increase. Second, capacity constraints might suppress growth as demand-side bottlenecks in the movement of goods become more frequent.

By Sarah Arteaga, a Regional Economic Information Network director in the Atlanta Fed's Jacksonville Branch


March 14, 2013

The Sixth District’s Exports to the European Union

The European debt crisis erupted at the end of 2009, after Greece revealed that its government finances were in very bad shape. Stresses in the financial markets, brought on by investor concerns about Greece’s and other European governments’ ability to pay their debts—as well as worries about the banking system—were quickly transmitted to Europe’s economy.

Real gross domestic product in the 27-country European Union (17 countries within that political bloc use the euro as a common currency) began to fall in the fourth quarter of 2011. At the time, a SouthPoint post looked at what the European crisis might mean for the Southeast, given the region’s trade connections with Europe. The conclusion was that Sixth District’s economy was not immune to European problems. Later, in early 2012, a SouthPoint post sifted through the U.S. International Trade Administration’s (ITA) data to determine which District’s states would be more vulnerable to the contracting EU economy.

The recently released ITA state merchandise exports data for 2012 now allow us to quantify how resilient the District’s exporters were to the European crisis last year.

First, let’s put the Southeast data in the national context. In 2012, U.S. merchandise export growth decelerated substantially, to 4 percent from 16 percent in 2011. (Part of the deceleration can be attributed to changes in prices—according to the U.S. Bureau of Labor Statistics, export prices grew 8 percent in 2011 and were virtually unchanged last year.) U.S. exports to the European Union fell 1 percent last year (to $265 billion)—a marked change from the 12 percent growth in 2011. Chemicals (led by pharmaceuticals), transportation equipment (mostly aerospace-related), computer and electronic products, and industrial machinery are the top four U.S. merchandise exports to Europe. Within those categories, growth in exports of pharmaceuticals held up pretty well last year, sales of transportation equipment were mostly unchanged, while U.S. exports to Europe of basic chemicals, semiconductors, and some types of machinery saw notable declines.

As it turns out, the Sixth District did better than the United States as a whole. Exports to the European Union increased 4 percent last year. All the Sixth District states except Mississippi are among the top 20 states that export to the European Union, and only Florida saw its exports to Europe shrink last year. Louisiana’s exports increased 15 percent and Alabama’s rose 8 percent, while sales to Europe were essentially unchanged last year for Georgia, Tennessee and Mississippi.

Looking into the industry mix—which products Europe imports from each state—can help explain the varying export performance across the District. (Another big factor, of course, is the countries within the EU to which states sell their products.)

Let’s start by looking at Louisiana—not only the state where exports to Europe grew at the fastest rate in the District last year, but also the nation’s fifth-largest exporter to the European Union. Louisiana’s biggest export to Europe, as to the rest of the world, is petroleum and coal products. These products accounted for about two-thirds of last year’s growth in the state’s exports to Europe. Most of the rest of that growth came from a 47 percent jump in exports of agricultural products, largely grains and oilseeds.

The industry mix is very different for Alabama, where exports to Europe also grew in 2012. Most of the growth was driven by a 43 percent increase in sales of transportation equipment. For most other industries in Alabama, sales also changed at double-digit rates—both up and down. There was little inching up or edging down; it was more like soaring or plummeting. Chemicals and paper—the state’s two other big exports to Europe—fell by about 25 percent, exports of fabricated metal products rose nearly 60 percent, and Alabama’s sales of wood products to Europe increased more than 80 percent.

Exports of wood products to Europe did even better in Georgia, growing by nearly 500 percent last year to $81 million. As Tom Cunningham—the Atlanta Fed’s regional executive for Georgia—explains, the European Union (and in particular, Germany) is increasingly relying on renewable energy, and there’s been a huge surge in taking Georgia’s readily available pine, pelletizing it, and shipping it off to be burned in Europe. This appears to be a common theme in the South Georgia pine regions. But pellets are still a niche export. Georgia’s total exports to Europe did not grow last year, mostly because the state’s sales of transportation equipment—Georgia’s largest export to the European Union—fell 10 percent.

Growth in exports to Europe also stalled in Tennessee last year. While many of the state’s industries faced a decline in demand from across the Atlantic, total exports to Europe held up because of 15 percent growth in sales of computer and electronic products. Tennessee’s second-largest export to Europe—medical supplies and equipment—also grew, albeit at a much more modest 2 percent.

Similar to Tennessee, but on a much smaller scale, Mississippi’s exports to Europe were boosted by sales of computer equipment and medical supplies and equipment. The aerospace industry also did very well in terms of sales to Europe. However, because of big declines in exports of chemicals and paper, Mississippi’s exports to Europe were essentially the same as in 2011.

While computer and electronics industry fared well in Tennessee and Mississippi, Florida was one of the worst hit in terms of exports to Europe. That industry is the state’s second-largest exporter to Europe, so a 23 percent decline in those exports accounted for a big part of the 7 percent drop in Florida’s total exports to the European Union.

Overall, the Sixth District’s exporters to Europe showed resilience last year, benefiting from the continent’s demand for our energy and agricultural products, certain types of electronic products and medical supplies, as well as a notable increase in prices for some of those products. Still, as European economy stabilizes in 2013, let’s hope for a better year for our exporters.

Photo of Galina AlexeenkoBy Galina Alexeenko, director of the Regional Economic Information Network for the Atlanta Fed’s Nashville Branch

September 24, 2012

Exports from U.S. Metropolitan Areas

The U.S. economy is famous for being consumer focused, with personal consumption expenditures accounting for about 70 percent of the country's gross domestic product (GDP). Compared with other economies, it is also a fairly closed one—exports' share of GDP is only about 13 percent. For many Americans, the phrase "international trade" is synonymous with "trade deficit" since the country for decades has imported more than it sold abroad. And although the aforementioned facts are perfectly true, they are masking an important and growing phenomenon—the U.S. economy's increasing reliance on foreign demand. So here's another fact: exports have become a potent engine of the current economic recovery, having contributed 45 percent to U.S. GDP growth since the end of the last recession—more than in any recent economic recovery.

Last year, the United States exported about $2.1 trillion in goods and services. Exports of services, such as consulting and other business services, accounted for about 30 percent of U.S. exports. (The United States is the largest exporter of services in the world.) The rest—about $1.5 trillion—were U.S.-made goods, industrial materials, and agricultural products, also known as "merchandise exports." Last week, the U.S. Department of Commerce released the report that showed a breakdown of U.S. merchandise exports by U.S. metropolitan areas for 2011. The report is based on the U.S. Census Bureau's Origin of Movement–ZIP code Based Series, which allocates exports to states and localities based on the address of the legal entity, such as a manufacturer, that receives the benefit from the export transaction.

The data for merchandise exports are now available for the 367 metropolitan statistical areas (MSAs), although the value of those exports is concentrated in the top MSAs. In the Sixth District, five MSAs showed up on the top-50 list: Miami-Fort Lauderdale-Pompano Beach (#5), New Orleans-Metairie-Kenner (#15), Atlanta-Sandy Springs-Marietta (#18), Tampa-St. Petersburg-Clearwater (#38), and Nashville-Davidson-Murfreesboro-Franklin (#45). Together, just these District MSAs alone accounted for about 7 percent of the country's merchandise exports last year.

The Miami metropolitan area is by far the largest exporter in the District. In 2011, it exported $43 billion worth of merchandise, accounting for two-thirds of Florida's merchandise exports. Miami's exports are dominated by computer and communications equipment and are shipped mainly to Latin America. For Florida's second-largest exporter, the Tampa metropolitan area, computer and electronic products were also the dominant export, but Tampa's export destinations were a bit more diversified across continents—in addition to Latin America, a big share of Tampa's exports sold in Canada, India, and China. Miami and Tampa are also big exporters of transportation equipment.

The Sixth District's second-largest exporter, the New Orleans metropolitan area, stood out in 2011 as the metropolitan area that recorded the highest exports growth in 2011 among the top 25 metropolitan exporters. Exports from New Orleans soared more than 45 percent between 2010 and 2011, boosted to a large degree by higher shipments of petroleum products. Top export destinations for the New Orleans area last year were Japan, China, Mexico, Singapore, and the Netherlands.

Somewhat surprisingly, Singapore—a small city-state—is also the third-largest export destination (our neighbors in North America took the first and second place) for goods produced in the Atlanta metropolitan area—my former hometown. Atlanta's exports are concentrated in transportation equipment and machinery. And finally, the Nashville metropolitan area (which happens to be my new hometown), which is known for its auto industry, relies on exports of transportation equipment, as autos and parts follow the NAFTA supply chains.

Overall, the latest MSA export data clearly show that a lot of products made, extracted, or grown in the Sixth District's largest MSAs end up in foreign countries. So, no wonder the latest slowdown in global growth has become a concern for many of the region's businesses.

Photo of Galina AlexeenkoBy Galina Alexeenko, director of the Regional Economic Information Network at the Atlanta Fed's Nashville Branch