NAM: Manufactured goods export growth slowing

Manufactured goods continued to dominate U.S. trade in October, but U.S. manufactured goods export growth has flattened in recent months, according to data released by the Commerce Department on December 10.

October’s seasonally adjusted manufactured goods exports were $85.3 billion, accounting for 76 percent of all U.S. merchandise exports. Seasonally-adjusted manufactured goods imports stood at $118.6 billion, 73 percent of U.S. merchandise imports.

While the raw data indicate that manufactured goods exports and imports increased in October from September, this is due to seasonal factors. A better picture emerges when the data are seasonally adjusted. Viewed this way, both manufactured goods imports and exports declined in October, but the 1.4-percent decline in imports was considerably larger than the 0.6-percent decline in exports. As a result, the manufactured goods trade deficit contracted slightly to $33.4 billion. October marked the second month of trade balance improvement, and the October deficit was nearly $7 billion smaller than in August.

Contributing to the flatness in October exports were monthly declines in commercial aircraft and semiconductor exports, two important sectors for U.S. trade. The import decline was particularly notable in iron and steel, computers and computer accessories, civilian aircraft and telecommunications equipment.

October manufactured goods exports continued the virtually flat trend they have been on since June 2010, as shown in the graph below. This is not yet reflected in the year-to-date figures, as January-October manufactured goods exports are still running 20 percent ahead of the comparable period for 2009. This growth rate, however, will be endangered if manufactured goods exports do not soon break out of their recent pattern of slow growth.

As has been the case for three years, the latest data show that U.S. manufactured goods trade with U.S. trade agreement partners is running a surplus. So far this year, that surplus is at an annual rate of $20 billion, demonstrating that the U.S. trade agreement program has been the brightest part of the U.S. trade picture.