Tennessee Trade Report 1st Quarter 2024

Tables and Graphs

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It was a very good quarter for most Tennessee exporters.  At $10.248 billion, Tennessee exports were 5.3 percent higher in the 1st quarter of 2024 than they were in the 1st quarter of 2023.  This compares to a national decline of 0.3 percent over the same period.  Tennessee stood 16th among the American states in its export growth. Most of the state’s major export industries reported solid gains or better.

Drilling Down: The Medical Sector Shines

This quarter, we look most deeply into the state’s largest export industry: medical goods. Foreign shipments of medical products grew from $908 million to $1.142 billion for the quarter, a 26 percent increase. Nine different countries purchased more than $20 million in medical goods from state producers.  They were led by the Netherlands ($270 million), China ($176 million), Belgium ($151 million) and Japan ($151 million).  Much of the exports to the Netherlands and Belgium, are, of course, in transit to other European countries.  Medical needles, ophthalmic instruments, and electro-diagnostic equipment are three of the biggest exported medical goods, but the largest amount of shipments are in the hard to characterize “miscellaneous” category.

A second medical-related export that had a very strong quarter was that of orthopedics and artificial joints. Here exports were up 44 percent (to $511 million). The Netherlands again led the way, with Japan and Singapore also substantially increasing their imports of this Tennessee product.

A newer state export was x-ray tubes. Shipments of x-ray tubes expanded from $6 million to over $51 million this quarter. Almost all of them went to either China or the Netherlands.

A last large medical-related export to detail is pharmaceuticals. (This export is generally reported as a chemical, but it is obviously for medical purposes!). Tennessee exported $322 million in pharmaceuticals in the first quarter of 2024, a thirteen percent increase from a year ago. Most go to the by-now usual subjects: Belgium, China, and Japan, though this time Canada joins the list.

A Strange Quarter for Motor Vehicles

Turning to the state’s second largest export sector, motor vehicles, it was an odd quarter.  Shipments of cars exploded, while those of SUVs crashed. (Pun intended!)  Car exports rose from $64 million to $308 million. SUV exports fell from $536 million to $324 million.  This is a turnaround from recent quarters in which SUV shipments have grown much more than car shipments.  EV exports, by the way, grew 130 percent (to $145 million, almost all to Canada).  Auto exports are largely to Mexico and Canada, although the Middle East purchases a substantial number of Tennessee vehicles too.

Elsewhere

The most spectacular performance of any state export was arguably that of digital processing units.  Shipments more than doubled (to $470 million). The exports to its traditional largest destination, Canada, were actually down, but massive increases to Singapore (from $10 million to $63 million), Finland (virtually nil to $58 million), and Colombia ($1 million to $37 million) more than made up for the loss. Other exports that had a strong quarter included bituminous coal ($133 million, up 34%), cellulose acetates ($129 million, up 34% as well), cotton ($380 million, up 38%), artificial filament ($50 million, up 94%), and gear boxes ($33 million, up 59%)

Few Industries Struggled, but those that did Struggled Mightily

The quarter was unusual in how few major export sectors suffered sizable reverses. But those that did, suffered big ones.  The first quarter of 2023 was the best quarter ever for whiskey shipments, and that performance just could not be repeated last quarter. Whiskey exports shrunk from over $400 million to $181 million, a huge loss. These losses were global, although centered in Europe. But markets as distinct as Australia and the United Arab Emirates saw whisky purchases diminish substantially.

An even bigger loss in dollar terms was in platinum and precious metal waste and scrap (dropping from $370 million to $115 million). These losses were centered in Germany ($240 million to $57 million) and are the major reason why Germany was the worst performing of any of the state’s largest export markets.

Other sectors having a tough quarter were wood pulp (off 84 percent), computer storage, and lawn mowers and boats (the latter two both in Canada).

Asia Was the State’s Best Export Region

Unlike recent quarters, export growth was not led by Canada or Mexico. Both markets were flat. This quarter, the best markets were mostly in Asia.   These included China (up 31 percent), India (up 55 percent) and Singapore (up 24 percent). In the EU, Tennessee shipments increased strongly by almost $150 million (7 percent). Several other countries of note were Saudia Arabia (55 percent, due to autos), Colombia (63 percent, digital processors), and Switzerland (53 percent).

Many Happy Returns?

All things considered, it was a pretty good quarter for most state exporters. Tennessee actually increased its percentage of America’s total exports. We will watch with interest how the year progresses.