Tennessee Trade Report 4th Quarter 2022

Tables and Graphs

Last quarter’s export numbers were, on the surface, nothing to brag about. At $9.073 billion, Tennessee exports were off 4.25 percent from the 4th quarter of 2021.  This was far below the national 8.4 percent gain in exports and placed Tennessee a lowly 41st among all U.S. states.  However, this is misleading.  In last year’s 4th quarter, the state shipped covid vaccines worth just over a combined $1 billion to 32 different countries. Those exports have completely ended. This accounts for the quarter’s overall decline in exports. In truth their importance to the state economy was minimal since state businesses were involved only in their packaging and shipment. The manufacturing was elsewhere. Tennessee thus felt little economic pain from this loss, even if it was a big number.  If we subtract it out, Tennessee non-covid vaccine exports actually rose 7.9 percent vs. last year’s fourth quarter. And this is pretty much in line with the national performance.

These gains were led by a surge in SUV shipments. Their dollar value more than doubled for the quarter (to $388 million), with Canada, Australia, and the Gulf states being the major destinations.  Canada also more than quadrupled its imports of Tennessee-built EVs. Staying with motor vehicles, the state also produced very large increases in its exports of platinum scrap (and palladium), almost all of this going to Germany. (These are related to emissions controls and catalytic converters.)

Tennessee exports two major goods used in making textiles and apparel, cotton and artificial filament tow. Both had very strong quarters. Cotton shipments more than doubled (to $133 million), while artificial filament tow exports rose more than 40 percent (to $111 million).

It was a great quarter for whiskey exports too. They almost doubled (from $158 million to $305 million). It was global, but led by a $70 million increase to the Netherlands and sizable gains in the U.K and the United Arab Emirates.  Also notable was a $50 million gain in shipments of aircraft parts. Much of this was to China. A big one-off export was a sale of paintings (or a painting?) worth $30 million to someone in the U.K. Also interesting was a $21 million shipment of industrial robots to Malaysia.

Vaccines, of course, were not the only product in the red for the quarter. One of the most significant drops was smartphones.  Their exports were down by a full one quarter (to $393 million).  Medical instruments, although still the state’s largest export, also took a hit, losing about $75 million in foreign sales for the quarter. Laptop shipments dropped by $40 million. Artificial joints (and parts) lost about $55 million in sales. Waste and scrap (excluding platinum) and medicaments complete the sectors were exports were off by $40 million or more. Note how varied were these industry sectors.

Turning to markets, the best performing for the quarter were in east Asia and the euro zone. State exports were up across east Asia, with the one exception of Hong Kong (where the overwhelming Tennessee export is smartphones). Chemicals, cotton, and medicaments produced a $ 42 million gain in China, while automotive-related shipments powered a $ 79 million increase in Japan. Korea and Taiwan turned in solid numbers as well. The countries of the euro zone combined to purchase an additional $200 million of Tennessee-produced goods, a 13 percent gain over a year earlier. This growth, though, was almost entirely due to two countries, Germany and the Netherlands. Exports to the U.K., meanwhile also rose substantially, from $156 million to $216 million, largely on the back of whiskey and that painting sale.

The vaccine shipments were largely to south and southeast Asia (and to Canada). But even if we subtract them out, it was not a particularly strong quarter in these regions. Tennessee’s largest market in this region of the world, Singapore, lost $36 million dollars in sales this past quarter (down to $ 224 million).

Turning to the Americas, losses in Chile, Colombia, and Honduras produced an overall decline of $15 million in exports to Latin America. In Canada, Tennessee’s export numbers had to overcome the $268 million loss in vaccine shipments. That turned out to be too much to ask, but at least the combined exports in all the other sectors did increase by about $73 million. Mexico was the strongest big market in the Americas. Shipments to Mexico were up by almost $100 million.

Basically, the 4th quarter was a pretty positive one for state exporters, even if the raw numbers seem to tell a different story. But there was a substantial amount of volatility across export sectors. To an extent this is a sign of how important changes in global supply chains are becoming to Tennessee’s export numbers. It’s also a signal that the global economy is pulling in different directions in different places.