Business Monday

WorldCity: Red ink abounds among South Florida exports

There’s a lot of red ink in the South Florida export picture so far this year.

Red ink for civilian aircraft, engines and parts, the leading export, down $400.19 million from the same six month period in 2013. Red ink for cellphones and related equipment, the No. 2 export, down $179.38 million.

There’s red ink for the No. 3 export, computers, down $222.35 million. Red ink for gold, ranked No. 4, down $1.03 billion. Red ink for the No. 9 export, computer chips, off $255.68 million. In fact, of the top 15 exports through June of this year, 10 are down from their totals from the same six months of 2013, according to WorldCity’s analysis of U.S. Census Bureau data.

Let’s take a quick run through some of the biggest “losers” among South Florida’s top exports and what’s going on before turning to a little good news in the data.

Aircraft, engine, parts: The first thing to understand about this export category is that it is highly volatile. Aircraft, the largest part of this category, is expensive and purchases are, consequently sporadic. Despite the volatility, exports to Brazil have accounted for more than 50 percent of all purchases all but one year in the last decade. So far in 2014, the total is 58 percent. While the $124.98 million decrease from 2013 is large, the single biggest drop is shipments to Mexico. Exports to Mexico have fallen $179.79 million through the first six months of the year — right back to the level of 2010 through 2013. 2013 was an aberration — a year with those sporadic purchases, and exports that year totaled $205.41 million. Mexico ranked No. 2 behind Brazil last year; this year, it ranks at 20 percent. Exports are also off sharply to El Salvador.

Cellphones, related equipment: South Florida leads the nation in the export of cellphones and related equipment, serving as the shopping cart for Latin America. Since 2007, the year Census began treating cellphones like a telephone — the category, while dominated by cellular devices, includes landline telephones and well as parts — rather than a walkie-talkie, these exports have not decreased in value. Until 2014. The biggest culprit in the $179.38 million decline in exports from South Florida is Venezuela. Exports to the beleaguered nation — one of South Florida’s most important trade partners — are down $176.24 million through the most important market, and exports are down 87.53 the first six months of 2014, a 74.29 percent decline. A year ago, exports to Venezuela were less than only those shipped to Brazil, Colombia and Paraguay (which is essentially a transshipment hub for many exports to Brazil because of high tariffs and duties in the latter.) In 2014, Venezuela ranks No. 11.

Computers: While the decrease in cellphone exports is disappointing and slightly unexpected, the drop in computer exports is not particularly surprising. As is happening in the United States and elsewhere around the world, people at work and at play are relying less on desktops and laptops and more on ever-more-powerful and versatile cellphones. The biggest decreases from South Florida were in computers shipped to Chile and Peru. Exports to Chile fell from $227.33 million through June of 2013 to $150.22 million this year; Chile is the fourth most important South Florida market for these exports, after Brazil, Colombia and Paraguay. Exports to Peru fell from $204.02 million last year to $150.22 million this year.

The other two exports that are down significantly in 2014 — gold and computer chips — have been discussed in two recent columns, so I won’t go into great detail here. The $1.1 billion decrease in gold exports is largely due to an improving global economy, which pushes down the demand and price for gold, which was largely being imported from Mexico and Colombia and exported to Switzerland. The $255.68 million decrease in computer chip imports is directly tied to Intel’s decision to shutter its manufacturing operations in Costa Rica.

Amid all this gloom and doom, there are glimmers of hope.

Among the 1,186 export “products” shipped from South Florida so far in 2014 — there are a total of 1,267 categories at the specific grouping used for this report — five have registered gains in excess of $40 million, including one that is up 235.87 percent. And they are quite different, to say the least: medical instruments; yachts and other boats; military aircraft; insecticides and fungicides; and paintings and other artwork.

Medical instruments: Through the first six months of the year, medical instruments — everything from MRI machines to syringes — have increased more in value than any other export, up $79.85 million to $856.45 million. The category now ranks as the fifth most valuable export from the Miami Customs district, trailing only civilian aircraft, engines and parts; cellphones and related equipment; computers; and gold. These exports go overwhelmingly to Latin America.

Yachts, other boats: South Florida is an important import and export destination for yachts, as is apparent to anyone who spends a little time along the coastline. This category is ahead of the 2010 record pace, up $74.17 million to $267.78 million and up from a No. 25 rank among all exports to No. 21. Three countries account for more than half the value of these South Florida exports: Italy, Spain and Mexico.

Military aircraft: Exports of military aircraft from Miami increased $57.53 million, from $24.39 million to $81.92 million, a 235.87 percent increase from the same period in 2013. The answer lies in one country: Brunei. Brunei is a small nation tucked into the island of Borneo in Southeast Asia. Brunei has been making purchases from the United States for the last several years. Military aircraft jumped from a No. 181 rank to No. 70.

Insecticides and fungicides: Exports of insecticides and fungicides have increased $44.43 million through the first six months of 2014 when compared to the same period of 2013, from $91.64 million to $136.08 million, and have jumped in rank from No. 62 to 41. The big increase over the 2013 total is shipments bound for Brazil, which for the first time in 2013 accounted for more than 20 percent of all U.S. exports in this category, second only to Canada. From South Florida, $89.04 million of the $136.08 total went to Brazil.

Paintings, drawings and other artwork: Exports of paintings, drawings and other artwork increased $43.46 million through the first six months of the year, with the biggest destinations being the United Kingdom, Switzerland, Brazil and France. The total increased from $57.48 million to $100.94 million. The previous high through June was in 2007, before the global economic crisis, when the total was $92.87 million. Exports in this category are dominated by the New York City Customs district, which totaled $3.80 billion of the $4.26 billion total through June. Miami ranked No. 3, also trailing Los Angeles.

Next week, we’ll look at South Florida’s imports.

Miami’s top exports

Changein rank June 2014 Miami Exports June 2014 YTD 1-year change 1-year change 10-year change 10-year change
Total, all Miami exports $31,849,277,824 -$2,429,880,436 -7.09% $17,226,820,340 117.81%
0 1 Civilian aircraft, engines parts $ 2,932,570,253 -$400,191,938 -12.01% $1,822,131,461 164.09%
1 2 Cellular, landline phones, parts $ 2,561,611,900 -$179,377,814 -6.54% $2,280,822,424 812.29%
1 3 Computers $ 1,871,495,340 -$222,354,012 -10.62% $1,099,645,614 142.47%
-2 4 Gold $ 1,756,303,057 -$1,033,133,927 -37.04% $1,663,393,650 1790.34%
1 5 Medical instruments $ 856,446,767 $79,851,517 10.28% $640,759,201 297.08%
1 6 Medicine $ 754,322,723 $24,896,154 3.41% $355,901,095 89.33%
2 7 Printers, all types, parts $ 657,883,735 $3,859,318 0.59% $636,493,391 2975.61%
0 8 Computer parts $ 654,059,130 -$27,104,610 -3.98% -$294,372,068 -31.04%
-4 9 Computer chips $ 628,921,505 -$255,676,850 -28.90% -$76,448,416 -10.84%
2 10 Motor vehicles for transporting people $ 412,484,541 -$45,910,420 -10.02% $222,159,940 116.73%
2 11 Motor vehicle parts $ 410,120,523 -$22,145,520 -5.12% $262,117,623 117.10%
-1 12 Cameras, camcorders $ 402,670,933 -$61,016,194 -13.16% -$263,723,879 -39.57%
1 13 Cotton, 85% cotton $ 372,226,084 $26,646,964 7.71% $220,697,108 145.65%
1 14 Parts for heavy machinery $ 311,396,474 -$32,219,560 -9.38% $30,049,020 10.68%
1 15 Military aircraft engines, engine parts $ 305,480,402 $7,446,337 2.50% $200,921,576 192.16%

Source: WorldCity analysis of U.S. Census Bureau data