Business Monday

10 things to know about U.S., South Florida trade

ROBERTS
ROBERTS

Here are 10 things you need to know about South Florida and U.S. trade with the world.

This column is timed to the release of the May import-export trade data from the U.S. Census Bureau, which occurred last week. I will resume my in-depth weekly profiles of South Florida’s top 10 trade partners next week, with No. 8 Venezuela.

First, 2015 is not shaping up to be a good year. Not for South Florida, not for the United States.

South Florida is on track to see its trade decline for the third consecutive year, something that has not occurred in at least two decades, if ever. The United States, meanwhile, remains on track to suffer a loss in trade for the first time in at least as long without a major shock to the economy like those that occurred in 2001 and 2009.

Through May, South Florida trade with the world was down $2.23 billion to $45.47 billion, a decline of 4.67 percent from the same period in 2014. That’s the lowest level through the first five months since 2011. U.S. trade, meanwhile, is down a similar percentage — 4.44 percent — with overall trade down $71.66 billion to $1.54 trillion. Again, that’s the lowest total at this point since 2011.

Second, the seismic changes in oil and gasoline trade continue to reverberate. For the first time in a decade, oil is not the leading import into the United States at this stage of the year. In addition, it is not likely to be by the end of the year for the first time in 20 years.

Oil imports into the United States are down $52.81 billion through May — a decline that is more than South Florida’s total trade with the world — and an astonishing 49.22 percent drop. The new No. 1 is the same No. 1 from this time in 2004: Motor vehicles.

Third, a change that offers some hope — and it’s not really a change at all. Los Angeles, which trailed New York City in the ranking of the nation’s leading Customs districts through the first four months of the year, passed it in May. That’s the change.

Here’s why it’s not a change: Los Angeles often starts the year trailing New York City but generally slips past it within the first four to five months. And here’s why it offers hope: When the United States is importing through Los Angeles, it is because Americans are buying. If Americans are buying, the economy is generally doing well. That’s the good news. The bad news is that Los Angeles’ trade through the first five months is lower than any year since — you guessed it — 2011.

Fourth, as South Florida’s trade with China increases — it now ranks third behind No. 1 Brazil and No. 2 Colombia — the region’s long-standing reign as nation’s king of the trade surplus will likely come to an end. For every dollar of trade with China, seven cents is a South Florida export. For every dollar of South Florida trade with the world, 56 cents is an export.

Through the first five months of 2015, Seattle has a larger trade surplus than does South Florida. Seattle, home to the majority of Boeing’s manufacturing, has been the only Customs district to surpass South Florida over the course of the last two decades and only sporadically until recently. This year, however, Houston has also surpassed South Florida — something no one would have foreseen a decade ago, when Houston was awash in imported oil and deficits.

Fifth, South Florida imports in two categories suggest that we need not worry about the wealthy. Aircraft imports into South Florida — and these are smaller, regional aircraft or private-use jets rather than large commercial jets — are up 39.08 percent in value this year, when compared to last year. Aircraft imports are up 171.42 percent over a two-year period and 254.67 percent over the last three years. Five years ago, South Florida ranked No. 11 in the nation for these imports; in 2015, it ranks No. 3, behind only two Customs districts that border Canada, where Bombardier is based. Embraer, the Brazilian jet manufacturer, has its North America headquarters in South Florida, but imports from France are also up sharply. Aircraft imports are South Florida’s fourth most important import this year, up from No. 26 five years ago.

The other import that suggests we need not worry about the wealthy, or at least the comfortable, is yachts and other pleasure craft. These imports have increased 128 percent from the same five-month period of 2014. In this category, South Florida leads the nation. Most of these boats have inboard motors and are at least 26 feet in length.

Sixth, South Florida remains the nation’s No. 12-ranked trade partner, about where it has found itself most of the last two decades, with nominal fluctuation. It did rank No. 10 at the bottom of the global recession, as it became a major hub for gold imports — largely from Mexico and Colombia at the time — and exports — largely bound for Switzerland at the time. Gold, or more accurately waning interest in gold as the global economy recovered, is a big part of the reason for South Florida’s declining trade, as has been discussed previously.

Seventh, a troubling sign: South Florida exports to Brazil are down $949.25 million, or 18.19 percent, this year. That’s a steep decline and proof, if anyone needed it, that Brazil’s economy is challenged. South Florida is the nation’s No. 1 gateway for U.S.-Brazil trade.

Eighth, a less troubling big drop: South Florida imports from Costa Rica are off $1.25 billion. Overall South Florida imports are off less, $1.21 billion. The steep decline is, as previously discussed, due to imports from computer chips that decreased as Intel moved much of its manufacturing to Malaysia. Otherwise, South Florida imports are up.

Ninth, France has jumped into South Florida’s top 10 behind the strength of aircraft and perfume imports.

And No. 10, Greece’s trade through May was at its highest since 2009, its rank up seven positions from 2014, to No. 79. Don’t expect that to last, given the turmoil in its economy.

A third down year for South Florida trade?

Chg.

in rank

Rank

Country

May 2015 YTD

1-year change

1-year change

10-year change

10-year change

World Total

$45,469,975,686

-$2,228,952,807

-4.67%

$19,563,368,840

75.51%

0

1

Brazil

$5,895,247,582

-$851,462,413

-12.62%

$2,288,193,563

63.44%

0

2

Colombia

$3,370,469,438

-$469,926,465

-12.24%

$1,745,845,746

107.46%

0

3

China

$2,528,442,859

-$84,937,206

-3.25%

$1,261,712,619

99.60%

2

4

Dominican Republic

$2,144,419,005

$95,996,734

4.69%

$493,760,635

29.91%

0

5

Chile

$2,110,730,990

-$18,587,223

-0.87%

$1,311,864,040

164.22%

1

6

Honduras

$1,868,968,037

$161,817,179

9.48%

$542,577,658

40.91%

2

7

Peru

$1,661,570,978

$264,317,645

18.92%

$1,148,588,825

223.90%

0

8

Venezuela

$1,499,980,784

-$197,979,702

-11.66%

-$63,762,482

-4.08%

-5

9

Costa Rica

$1,309,126,082

-$1,261,171,236

-49.07%

-$33,753,038

-2.51%

3

10

France

$1,276,356,933

$213,674,182

20.11%

$704,787,909

123.31%

12

11

Switzerland

$1,265,514,619

$617,071,092

95.16%

$1,130,617,569

838.13%

0

12

Argentina

$1,236,967,982

$137,078,002

12.46%

$682,129,910

122.94%

-3

13

Ecuador

$1,234,864,294

-$146,920,723

-10.63%

$701,282,624

131.43%

0

14

Guatemala

$1,115,987,434

$67,079,841

6.40%

$213,944,887

23.72%

5

15

Italy

$1,000,196,446

$278,648,715

38.62%

$482,365,004

93.15%

Source: WorldCity analysis of U.S. Census data

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