Business Monday

No. 1-ranked aviation exports continue slide

Ken Roberts
Ken Roberts

For more than a decade, South Florida’s leading export to the world has been the category that includes civilian aircraft, aircraft engines and aircraft parts.

This is the first in a series of columns on South Florida’s top 10 exports, following a similar series on the top 10 trade partners and the leading imports.

Over the course of the last decade, on an annualized basis, exports from South Florida — and they are almost exclusively flying out of Miami International Airport — have totaled $49.17 billion. That is 6.1 percent of the nation’s total for those 10 years, from 2005 to 2014. A pretty impressive tab.

But so far this year, these exports have fallen in value. South Florida aircraft, engine and part exports are down 17.83 percent through the first eight months of 2015, according to the latest U.S. Census Bureau data available, helping drive down all South Florida exports 7.94 percent.

U.S. rank: The category is also the nation’s leading export, and has been for years, largely thanks to Boeing, the Chicago-headquartered multinational with its primary manufacturing base in Seattle.

The Seattle Customs district was responsible for 28.84 percent, or $232.63 billion of all the U.S. exports during the same period that South Florida was responsible for 6.1 percent and $49.17 billion of the total.

South Florida is more important historically than currently, the reason for which I will explore in just a moment.

In the last decade, South Florida has exported more in this category than all but Seattle and four other Customs districts. The others are New York City, Los Angeles, Cleveland and Honolulu, in that order. Seattle’s total is nearly three times that of No. 2 New York City and almost exactly four times that of Los Angeles. Cleveland, Honolulu and South Florida are closely bunched together, with a range from $49.88 million for Cleveland to South Florida’s $49.17 billion.

But through August of this year, South Florida has slipped from a No. 6 rank to No. 8, falling behind the Atlanta/Savannah Customs district this year and Chicago a year ago.

At the same time, U.S. exports of aircraft, engines and parts have actually increased this year, up 4.83 percent. Seattle exports are up, No. 2 New York City is flat, No. 3 Honolulu is up, Chicago is up and also has advanced to No. 4, and Cleveland, rounding out the top five, is also up and has advanced two positions from last year. Los Angeles, at No. 6, is down sharply and down two positions while No. 7 Atlanta/Savannah is up slightly but has advanced two positions, one ahead of South Florida.

South Florida trade: Not only are these exports from South Florida down this year, they are down for the third consecutive year. For the last three years, aircraft, engine and part exports had topped $4 billion by August. Not so this year. The $3.46 billion total is the lowest since the $3.43 billion total in the first eight months of 2010. Despite this trend, the 2015 total remains higher than any year except for those last three.

Because of some changes made to the way Census reports out the data in aviation-related exports in 2004, it is challenging to go back further — on the export side, it is not possible to definitively separate out a Boeing aircraft from a GE-manufactured engine, for example, while on the import side it is possible to discern engines from parts and parts from aircraft.

That said, exports in this category, as now configured, did not top $3 billion for the first time through the first eight months of a year until 2009, and did not top $2 billion until 2007.

Export markets: In the three consecutive years that South Florida exports of aircraft, engines and parts have fallen, down $863.05 million in that time, exports to the leading market — Brazil — are off $729.89 million. Exports to No. 2-ranked Chile are down $123.07 million, and to the previous No. 3 and current No. 11 United Kingdom another $105.11 million in that time.

Brazil is a leading market for many of South Florida’s exports, given the size of its economy. In the aviation industry, however, that strength is magnified for a number of reasons, including that it is home to Embraer, the world’s third-largest jet manufacturer after the much larger Boeing and Airbus, and that the LATAM Airline Group, headquartered in Santiago, is the combination of the former Chilean airline LAN and Brazil’s TAM.

Until this year, Brazil has accounted for more than 50 percent of all South Florida exports in this category every year except one, and the 2009 total was 49.51 percent. With Brazil’s economy reeling this year, leading to exchange rate issues, exports to Brazil are accounting for 46.85 percent of the total.

Of the $729.89 million drop in exports to Brazil since 2013, $697.75 million have occurred this year alone.

The drop in exports to Brazil is certainly being felt locally, but it is also being felt nationally. Brazil, the No. 7 market nationally at this time last year, now ranks No. 9. Over the course of the last three years, U.S. aircraft, engine and part exports to Brazil have fallen more than all other nations in the world except for the United Arab Emirates and Japan. (China has been the nation’s No. 1 market three straight years.)

But, this year, those exports to Brazil have fallen only $259.69 million. What gives? Try Orlando International Airport. Exports to Brazil of aircraft, engines and parts have increased from $62.06 million last year at this time to $805.51 million. Exports which accounted for 7.76 percent of total Orlando exports now account for 62.74 percent.

Coming next: South Florida’s second most important export, the category dominated by cellphones.

Reach Ken Roberts, president of World City, at kroberts@worldcityweb.com. Twitter: @tradenumbers.

South Florida aircraft, engine, part exports are suffering

South Florida

aircraft,

engine,

part exports

August

2015 YTD

1-year

1-year

10-year

10-year

Change

in rank

August 2015

YTD

World total

$3,455,391,154

-$749,930,281

-17.83%

$1,807,935,990

109.74%

0

1

Brazil

$1,618,771,652

-$697,753,119

-30.12%

$732,293,812

82.61%

0

2

Chile

$219,961,298

-$134,612,766

-37.96%

$199,174,558

958.18%

0

3

Colombia

$178,295,337

$53,189,444

42.52%

$129,421,634

264.81%

1

4

Argentina

$126,449,542

$14,961,574

13.42%

$63,802,218

101.84%

-1

5

Germany

$95,476,439

-$25,746,530

-21.24%

$59,913,254

168.47%

4

6

France

$94,773,823

$44,233,655

87.52%

$53,123,679

127.55%

1

7

El Salvador

$78,243,361

$4,394,295

5.95%

$31,409,548

67.07%

6

8

Japan

$64,642,067

$22,994,583

55.21%

$42,974,008

198.33%

4

9

Peru

$62,320,556

$19,328,609

44.96%

$40,251,402

182.39%

12

10

Mexico

$59,065,916

$29,432,037

99.32%

$21,202,678

56%

-5

11

United Kingdom

$54,305,595

-$42,346,768

-43.81%

$14,859,806

37.67%

-5

12

Trinidad and Tobago

$53,589,556

-$28,456,150

-34.68%

$47,438,910

771.28%

-2

13

China

$52,475,723

$6,912,207

15.17%

$51,693,298

6,606.81%

5

14

Switzerland

$52,419,198

$20,564,254

64.56%

$49,834,544

1,928.09%

-6

15

Venezuela

$51,396,513

$258,191

0.50%

-$9,352,166

-15.39%

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

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