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Georgia’s streak of annual export records came to a halt in 2015, as the strength of the U.S. dollar and softer demand in both established and emerging markets conspired to see overseas sales decline on an annual basis for the first time since the Great Recession.
Exports shrank to $38.5 billion, a 2.1 percent decline from 2014. China, whose growth is expected to slow to 6 percent this year, seems to have been one of the main culprits, according to newly released numbers from the U.S. Commerce Department and circulated by the Georgia Department of Economic Development.
Georgia’s exports to China slumped by 14 percent to $2.6 billion, driving the country to No. 3 from its second-place perch behind Canada among Georgia’s top markets. Mexico jumped back to No. 2 as exports increased by 16.4 percent to $3.4 billion. Canada exports were basically flat at $6.4 billion.
At the same time, imports from China rose nearly 6 percent, widening trade gap after a Exports as a proportion of traffic at the Port of Savannah are declining, with more containers headed back to Asia filled only with air, according to reports.
Exports of Georgia’s top product by value, aircraft, were down 1.5 percent to $6.98 billion after growing at a strong pace in the past few years. Aircraft alone make up 18 percent of the state’s export value, and results in the overall aerospace sector weren’t all that grim, especially factoring in growth in key markets like Mexico (up 26 percent), Germany (55 percent) and Canada (150 percent).
Still, overall exports to Singapore, a big buyer of aerospace products, dropped by 12.5 percent. Brazil, another major overall market for Georgia machinery and goods, bought 15 percent less from Georgia as the country’s economy struggled and the real continued its slide against the dollar.
Mary Waters, deputy commissioner for international trade, said the decline in exports overall wasn’t altogether unexpected given the dollar’s strength.
“While the dollar value of exports dipped below last year’s record, Georgia exports held their ground and remain above 2013 totals. In the past decade, Georgia exports have grown more than 90 percent, which I’m tremendously proud of,” she said, pointing to the strength of the manufacturing sector even as significant declines were registered in paper (-10.3 percent), woodpulp (-10.1 percent), chemicals (-20.5 percent) and meats like poultry (-28.2 percent).
“Exports of the state’s top manufacturing goods – aviation/aerospace, machinery, motor vehicles — all showed positive growth in 2015 which sends an important message about the strength of the states manufacturing sector,” Ms. Waters said in an email.
One big surprise bump came from Saudi Arabia, where Georgia exports grew by nearly 61 percent to $1.1 billion. Ms. Waters said it was attributable to delivery of civilian aircraft and helicopters.
In a news release, the Georgia Department of Economic Development also pointed out that it was still a record year for international trade, with imports rising 5.7 percent to $88.5 billion from $88.3 billion last year.
Imports from Canada, a perennial top partner, dropped 16.2 percent to $4.2 billion, while the United Kingdom saw an increase of 68.2 percent to $3.5 billion. South Korea, which sends a lot of auto parts into Georgia to supply major plants here and in Alabama, stuck at the third spot for import markets with an 18.1 percent increase to $7.3 billion. Germany, another big auto-part exporter to Georgia, stayed at No 2 despite a 5 percent drop in total imports.
Imports create logistics jobs required to handle all this activity, but companies that export tend to hire more people and pay them better, which is why state leaders have been beating the export drum over the past few years.
“It is imperative that we get more and more companies involved in exporting, to ensure that the state remains competitive and well-positioned in the global economy. GDEcD’s international trade division will continue to work with exporters all across the state, particularly our small business exporters, to open up new markets and connect with global customers,” Ms. Waters said.
The department has international representatives in 11 markets to help companies conduct trade. Companies from around the state can meet them at the Go Global Reception in March. Learn more and register here.
