Amid trade friction, Alabama exports approach record total in 2018

Amid trade friction, Alabama exports approach record total in 2018
Alabama's overall exports were down only 2 percent in 2018 despite a heavy toll from trade disputes on the state's automotive and agricultural industries. Surges in aerospace, chemicals and paper products and big increases in exports to markets such as Japan and Argentina helped offset the losses in other sectors. (contributed)

Despite global trade tensions, the value of Alabama exports topped $21 billion in 2018 on increased shipments of chemicals, paper products and aerospace parts to overseas markets, figures from the U.S. Commerce Department indicate.

Still, U.S. trade disputes with China and other countries that are Alabama’s top export destinations took a toll on shipments from the state. Exports to China fell nearly 15 percent, and foreign-bound shipments of motor vehicles, primary metals and agricultural products declined, government trade figures show.

Overall, Alabama exports totaled $21.3 billion last year, falling just 2 percent shy of the annual record total of $21.8 billion set in 2017, figures indicate. Exports of Alabama goods and services reached 191 countries in 2018.

“While Alabama exports lagged a little last year, the $21.3 billion total is still impressive and signifies the importance of exporting as a key factor in Alabama’s economy,” said Greg Canfield, secretary of the Alabama Department of Commerce.

“We’re continuing to see growth within segments of the transportation industry, our No. 1 export sector, with increased exports in the aerospace sector moving from Alabama to world markets.”

With the value of Alabama exports increasing 34 percent over the past decade, the long-term outlook for export activity appears strong, Canfield said. Ongoing projects and proposed improvements at the Port of Mobile, one of the nation’s busiest seaports, will serve to enhance Alabama’s export potential.

“Priming Alabama’s infrastructure for future export growth will put us in a position to help grow the state’s global presence and create jobs right here at home,” Canfield said.

“Looking forward, the potential for greater export growth is there, and we are already exploring new and expanding markets for Alabama companies.”

Alabama’s auto industry produces around 1 million vehicles annually and ranks it as the No. 3 auto exporting state. (Mercedes-Benz)

Finding new markets

Among Alabama’s top five international trade partners, only exports to Japan showed an increase in 2018.

  • Canada: $4.1 billion – down 3 percent
  • China: $3 billion – down 14.8 percent
  • Mexico: $2.6 billion – down 12 percent
  • Germany: $2.5 billion – down 14 percent
  • Japan: $821 million – up 17 percent

Meanwhile, figures show Alabama exporters found new markets for their goods. They include Argentina (a 111 percent increase in 2018 from the previous year), Austria (a 64 percent gain), The Netherlands (up 67 percent) and India and Brazil (both up more than 50 percent).

Transportation equipment remained Alabama’s No. 1 export category in 2018, totaling $10 billion, a 9 percent decrease from the prior year. Exports of Alabama-made motor vehicles dropped 18 percent to $6.4 billion as shipments to key destinations including Canada, China and Germany declined.

Despite that drop, Alabama remained the No. 3 auto-exporting state last year, trailing only Michigan and South Carolina, government trade figures indicate.

Exports of Alabama-made aerospace products and parts continued to surge last year, rising 28 percent to $2.4 billion. The total is nearly $1 billion higher than the figure for 2016, data show.

In addition, Alabama exporters recorded healthy gains in many important categories during 2018. These included:

  • Chemicals: $2.6 billion, up 13 percent
  • Minerals (chiefly coal): $1.7 billion, up 18 percent
  • Paper: $1.2 billion, up 12 percent
  • Non-electrical machinery: $777 million, up 12 percent

Tariffs and trade countermeasures around the world, however, hit Alabama’s overseas shipments of primary metals, down 19 percent, and agricultural products, down 29 percent, figures show.

Oilseeds and grains, a category that includes soybeans, tumbled 26 percent last year.

International connections

Alabama ranked No. 24 among the states in export volume in 2018, dropping two spots from the previous year. Alabama’s decline of 2 percent last year trailed the overall U.S. gain of 7.6 percent.

Hilda Lockhart, director of the International Trade Office at the Alabama Department of Commerce, said the state’s economy continues to grow more globalized because of the international nature of key industries such as automotive and aerospace.

“The relationship between the state’s foreign direct investment and exports are closely linked because our largest industries in terms of FDI are also the largest exporters of manufactured goods,” Lockhart said.

“In addition, our export strength also comes from the small and medium-sized companies that the Department of Commerce works with every day to help expand their global footprint.”

The department’s International Trade Office offers resources to help Alabama companies enter profitable new overseas markets through frequent trade and business development missions, training, foreign-market information and international contacts.

The Commerce Department is a partner in the Export Alabama Alliance, a seamless network of international trade agencies that share the fundamental objective of helping Alabama companies expand their business internationally.

This story originally appeared on the Alabama Department of Commerce’s Made in Alabama website.

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