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State's Exports Decline 2.5% in Quarter, but Economists See Signs of Recovery

Although technology shipments continue to falter, other industries show healthy gains.

August 15, 2003|Marla Dickerson | Times Staff Writer

Exports from California dipped 2.5% in the second quarter as shipments of technology goods continued their long slide, according to trade statistics released Thursday.

Computers and electronics -- the state's No. 1 export merchandise -- declined for the 10th straight quarter to $8.6 billion.

That was a 14% drop from the April-to-June period a year ago, and just about half of what California technology companies had sold overseas in one record-setting three-month stretch during the height of the boom in 2000.

Still, there were signs that the worst may be over for the trade sector, which accounts for about 10% of California's economic output.

Although technology shipments faltered in the quarter, the pace of the decline has slowed significantly from the early days of the tech bust. And other important industries showed healthy export gains compared with a year ago. Indeed, six of the state's top 10 exports made gains over the first half of the year, with shipments of transportation equipment and agricultural goods up nearly 16% each.

"We're poised for expansion," said Tom Lieser, senior economist with the UCLA Anderson Forecast. "With a weaker dollar helping out, we're on the verge of turning it around."

For the three months ended in June, California exports totaled $23 billion, down from $23.6 billion in the same period a year earlier, according to government trade statistics compiled by the Massachusetts Institute for Social and Economic Research.

California's export tally for the first half of the year was $44.7 billion, down about 3% compared with the first six months of 2002. In contrast, the nation's exports climbed 3.4% in the first half of the year, capped by the strongest June in three years, according to figures released Thursday by the Commerce Department.

Increased shipments of civilian aircraft and other capital goods, as well as industrial supplies, food and consumer goods, boosted U.S. exports 2.4% in June. The strong showing surprised analysts and helped narrow the nation's trade gap to $39.5 billion from a revised $41.5 billion in May.

The U.S. figures include shipments of both goods and services. The California export data track only manufactured products sold overseas, leaving out some major revenue generators, such as movies.

Although California's export sector continues to lag behind that of the nation, economists found hopeful signs in the state's trade data. Notably, foreign buyers increased purchases across a broad range of products, including chemicals, food and metal products.

Although that hasn't been enough to spark a solid turnaround in the state's export figures, it's a sign of things to come, said Kelvin Lee, managing director for East West Bank.

"Our customers are telling us they're getting a lot more interest" from clients abroad, Lee said. "It might take a couple of quarters for that to translate into orders, but the interest is there."

Shipments to Mexico -- California's largest trading partner -- remained a weak spot, with exports down 9.5% to $7 billion through the first six months of 2003. And California exports to Japan were down 2.8% to $5.6 billion.

However, the state's exports to other top destinations were strong: They were up 12.5% to Canada and 11% to China in the first half of the year.

"All of our trading partners have their eyes on us," said economist Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange.

"As the U.S. economy improves, we can buy more from them. Then they can buy more from us. That's where the growth is going to come from."

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