Business Monday

Gateway City/Trend: Now, the bad news in South Florida’s trade picture

Ken Roberts is president of World City.
Ken Roberts is president of World City.

Take the top 50 South Florida trade partners, determine which 15 of those have seen their trade fall the fastest from the same 12-month period in the previous year and here’s what you get: a $12.15 billion drop in total exports and imports.

Last week was all sunshine: I reported on the 15 trade partners among the top 50 with the fastest growth. Ten of those 15, for example, were poised to register record trade for 2015, when the U.S. Census Bureau releases annual figures this Friday. I stopped at the top 50 because they account for more than 96 percent of all South Florida trade.

This week, as promised last week, I am focusing, to continue the metaphor, on the storm clouds in South Florida trade. To be sure, overall, South Florida’s trade picture is not pretty. For an unprecedented third straight year, South Florida’s trade with the world will have fallen.

Through 11 months of 2015, South Florida trade was off $8.43 billion compared to the same 11-month period of the previous year. Not surprisingly, the losses of the worst performers among the top 50, the $12.15 billion figure cited in the first paragraph, exceeds the total losses for all of South Florida.

It gets worse. U.S. trade will also have fallen this year, the first time it has done so in at least two decades without a significant shock to the U.S. economy, such as in 2001 with the terrorist attacks, or 2009, during the mortgage-led global economic crisis.

Before I provide some insights into what’s happening with South Florida’s trading relationship with some of the 15 worst performers, a few quick highlights:

▪ Four of the 10 are in South Florida’s top 10 trade partners, including the top two trade partners; last week, two of the top 10 were among the top 50 for one-year gains.

▪ Losses for two of the trade partners exceeded $2 billion through November with another three exceeding $1 billion.

▪ Nine of the 15 are in Latin America or the Caribbean, with seven in South America.

From the most rapid loss in trade to the least:

No. 41 Hong Kong: South Florida trade with Hong Kong is down 80.37 percent. That’s no typo. It is, however, due to Hong Kong’s trade with South Florida having doubled between 2013 and 2014 — a record year — and almost quadrupling from 2011. Then, last year, it collapsed. Exports, which dominate the trade relationship, were off 87.49 percent through November. The value of South Florida gold exports fell from $1.40 billion to zero. While U.S. exports of gold to Hong Kong were down last year, they did increase more than $1.1 billion from Los Angeles.

No. 25 Bolivia: Trade with the South American nation was down 43.94 percent through the first 11 months of 2015, with imports off 55.10 percent. Gold imports — starting to see a pattern? — were off almost 61 percent. During the global economic crisis, South Florida became a hub for gold trade — first from Mexico and Colombia, later to include Peru, Colombia and Bolivia, and almost all being shipped initially to Switzerland and then eventually Hong Kong and the United Arab Emirates.

No. 10 Costa Rica: This one is not about gold; it’s about computer chips, specifically those that had previously been manufactured outside San Jose and shipped, like all the Bolivian gold, through Miami International Airport. Those Intel chips are now largely being manufactured in Malaysia and entering the United States in Anchorage, Alaska. Costa Rica’s trade with South Florida was down 42.92 percent through November, with imports down 70.76 percent. The $2.20 billion import decrease was more than double the loss of any other top trade partner’s imports. Computer-chip imports into South Florida from Costa Rica fell more than 99 percent.

No. 9 Venezuela: This one is a well-known train wreck, but the story’s a little different this time around. Trade between South Florida and Venezuela, down 33.15 percent, is particularly discouraging considering it fell to a new 10-year low in November. While in years past, it was South Florida exports to the nation that were taking a hit, in 2015 it was imports, and specifically refined petroleum products into Port Everglades. That, of course, is largely due to the steep decline in the price of oil.

No. 24 Paraguay: Trade with this relatively small South American nation were off 29.06 percent through November of last year. Most of the loss was in cellphones, computers and video game consoles.

No. 14 Ecuador: South Florida trade with Ecuador is well balanced, and the losses were at 22.77 percent on the exports side and 20.04 percent on the import side.

No. 21 United Kingdom: Almost half of the $468.49 million loss was in the value of gold exports from MIA to the United Kingdom, which fell to zero. Prior to 2014, however, MIA gold exports to the United Kingdom were virtually nonexistent.

No. 1 Brazil: Although the percentage losses pale when compared to Hong Kong’s — 17.74 percent compared to 80.37 — they are more than double the overall loss for South Florida of 7.92 percent. And, in value, the $2.78 billion loss is far greater than that for any other nation. Imports are up, surprisingly, with exports down $3.13 billion. These steep declines are consequential, varied and being felt throughout the South Florida trade community. Of the top 15 exports, 13 were down through November.

No. 2 Colombia: Of the remaining top 15 “losers” on the list, only Colombia’s trade was down more than $173 million; so the others were relatively small in dollar terms. Colombia’s losses through November, however, topped $1.08 billion. The two biggest trouble areas were the top two exports: cellphones and computers. Colombia’s trade with South Florida will likely have fallen below 2011 totals when annual data are released this week.

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

Biggest declines in trade, ranked by percentage decrease

Total Miami trade

Nov. 2015

YTD

1-yr.

$ change

1-yr.

% change

10-yr.

$ change

10-yr.

% change

Change

in rank

Nov. 2015

YTD rank

World total

$98,002,891,733

-$8,429,365,855

-7.92%

$38,048,904,304

63.46%

-26

41

Hong Kong

$398,788,198

-$1,632,512,810

-80.37%

$108,998,147

37.61%

-7

25

Bolivia

$1,079,547,603

-$846,149,759

-43.94%

$867,062,004

408.06%

-6

10

Costa Rica

$2,871,919,891

-$2,159,521,879

-42.92%

-$323,400,702

-10.12%

-2

9

Venezuela

$2,908,205,114

-$1,441,843,634

-33.15%

-$992,026,291

-25.44%

-3

24

Paraguay

$1,143,681,653

-$468,487,373

-29.06%

$414,849,181

56.92%

-4

14

Ecuador

$2,344,567,591

-$645,706,986

-21.59%

$1,195,888,019

104.11%

-1

21

United Kingdom

$1,451,694,900

-$350,459,128

-19.45%

$90,868,970

6.68%

0

1

Brazil

$12,913,673,888

-$2,784,814,391

-17.74%

$4,824,822,556

59.65%

0

29

United Arab Emirates

$913,308,877

-$172,108,574

-15.86%

$767,105,588

524.68%

0

26

South Korea

$1,066,725,398

-$186,840,757

-14.90%

$682,626,068

177.72%

0

2

Colombia

$7,011,887,276

-$1,087,712,061

-13.43%

$3,442,183,221

96.43%

-3

33

Netherlands

$805,297,741

-$117,843,373

-12.77%

-$294,356,838

-26.77%

-1

35

Uruguay

$648,201,014

-$93,880,296

-12.65%

$408,940,605

170.92%

-1

50

Malaysia

$201,764,467

-$28,391,897

-12.34%

-$1,507,477

-0.74%

1

27

Haiti

$1,002,629,125

-$137,734,330

-12.08%

$263,208,613

35.60%

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

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