South Florida’s exports of computer parts are off 15.32 percent this year, and that’s the good news. Over the past decade, computer part exports from South Florida have fallen a far more precipitous 50.13 percent.
In the world of export-import trade, ups and downs occur, but a loss sustained over a decade is rare. The average for all South Florida exports over the last decade is a 77.55 percent gain.
Nevertheless, today, computer parts rank as South Florida’s ninth most valuable export, with a value of $805.06 million through the first 10 months of the year, according to the most recent U.S. Census Bureau data available. More than two-thirds of those exports fly from Miami International Airport, given their relative value and lack of weight.
Overall South Florida exports are down a surprisingly steep 9.52 percent this year. Even with that poor showing, computer parts are falling more than 50 percent faster.
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U.S. rank: This is not exclusively a South Florida trend, however. Over the last decade, computer part exports from the entire country are down also, but only by 19.56 percent. They rank as the nation’s 14th most important export so far this year, down 3.02 percent to $13.34 billion.
A decade ago, computer parts were the nation’s sixth most important export, with a value through October of $16.58 billion. A year later, that total would rise to $17.24 billion before tumbling to $10.43 billion in 2009. The last four years, the total has been slightly greater than $13 billion.
I will not pretend to know all the ins and outs of the computer part business, but I imagine there are a number of factors at play, including that we use technology differently today, relying more on the Internet and our phones, and that manufacturing continues to shift offshore. While there has certainly been displacement within the industry, we now have better, faster, less expensive technology than ever, so the complaints are nonexistent.
South Florida trade: A decade ago, through the first 10 months of 2005, computer parts ranked as South Florida’s third most important export, trailing only the aviation category that includes aircraft, engines and parts, and No. 2 computers. Today, aircraft remains the leading South Florida export, while computers have slipped one, to No. 3, behind cellphones. Just five years ago, computer part exports still ranked No. 5.
The value of computer part exports peaked in 2006, when the total through October was $2.08 billion. For the last seven years, the value of computer part exports has fallen, from $1.92 billion in 2008 to the current total, $8.05 billion.
Export markets: South Florida exports to Brazil are accounting for 18.07 percent of the total this year, the first drop below 20 percent in at least a decade and almost certainly longer. From 2008 to 2010, Brazil accounted for more than 40 percent of all computer part exports; those were the years when overall South Florida computer part exports began the first of the still-ongoing seven-year tumble. Exports to Brazil held during those years but have now fallen five consecutive years.
The other market that has suffered over the past decade is Venezuela, whose economic and political situation makes Brazil’s look peachy by comparison. Exports to Venezuela have fallen 84.44 percent over the past decade compared to 62.05 percent for Brazil. Ranked No. 2 at the time, it now ranks No. 8 as a destination for computer parts departing from South Florida.
The current bright spot is Peru, ranked No. 2, with exports up to a record $137.30 million this year, a gain of 11.58 percent, and up 105.10 percent over the past decade. Remember, during this time, overall South Florida exports of computer parts have fallen 50.13 percent.
Among the top 25 trade partners in this category, exports to 20 over the last decade have fallen.
South Florida competition: Computer part exports are dominated by the El Paso, Texas, Customs district, with market share exceeding 60 percent for the first time in 2014 and increasing slightly this year to 61.76 percent. El Paso, which sits on the Texas-Mexico border, first led the nation in 2009, the year it replaced the Customs district that had ranked No. 1 for the exports for the three previous years: South Florida.
Until this year, South Florida had clung to the No. 2 ranking even as El Paso’s dominance continued to swell. But with its 15.32 percent decline compared to a 1.80 percent decline from San Francisco, South Florida slipped to No. 3.
Interestingly enough, San Francisco, in close proximity to the nation’s first tech hub, Silicon Valley, had been the nation’s leader in these exports a decade ago. These exports were then shipped to Asia, where they then became parts of computers and other devices being shipped around the world, including, to a large extent, to the United States, generally through Los Angeles.
Now, much of that work is being done in Mexico, and El Paso is the dominant player in the logistics network, even if computer parts are less important overall as a U.S. export today than a decade ago. The leading “port” within the El Paso Customs district for these exports is actually Santa Teresa in neighboring New Mexico, a town of about 4,000 people just north of El Paso. Of the $13.34 billion total, $5.79 billion crossed over in to Mexico from there, with another $2.45 billion departing from the city of El Paso. MIA ranks fourth, also trailing San Francisco International Airport.
This is the ninth in a series of column focused on South Florida’s top 10 exports. Coming next: South Florida’s 10th most important export this year is motor vehicles.
Reach Ken Roberts, president of World City, at kroberts@worldcity web.com. Twitter: @tradenumbers
El Paso now dominates computer part exports
Total U.S. trade
October 2015 YTD
October 2015 YTD
El Paso, Texas
New York City
Source: WorldCity analysis of U.S. Census Bureau data