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Annual Report: No. 6 Germany - Cars add to spark-fired trade

July 6th, 2006

Germany adds a non-traditional commodity to Houston’s trade mix: motor vehicles.

It isn’t often that Houston’s top import from a country comes from outside the energy sector. But that’s what happened with Germany, which supplied the Houston-Galveston Customs District with luxury cars in 2005.

Houston imported $959 million-worth of Mercedes-Benzes, BMWs, Porches, Audis and other vehicles from Germany last year. Although the cars held the top spot on the import roster, they were down 7.5 percent in value from 2004 when they topped $1 billion.

Imports of German auto parts, meanwhile, took a dive. Formerly ranked as the seventh most valuable import in trade with Houston, car components fell to the No. 25 spot in 2005. Auto part imports were off 50 percent, ending the year worth just more than $28 million.

The automotive imports came against a trade landscape that saw Houston and Germany exchange $5.7 billion in goods, a gain of 21 percent. The commerce was led by $4.1 billion in imports, a gain of nearly 19 percent, while exports hit $1.6 billion, up almost 26 percent from 2004. The exchange handed Houston a $2.5 billion deficit.

Refined oil was the second-most valuable German import – but it was a distant second, despite its colossal jump in value from a year earlier. Houston brought in $403.6 million in refined petroleum from Germany. That was an increase of more than 70 percent when compared with 2004 trade results. Imports soared after hurricanes Katrina and Rita damaged nine refineries along the U.S. Gulf Coast.

After Hurricane Katrina, Germany’s minister of the economy said global oil prices were on the rise because U.S. refineries were obsolete and their capacity was limited. Germany wasn’t the only country to rally to prevent dramatic energy shortfalls in the United States. Imports from France, Great Britain, Italy and Spain also rose last year.

Beyond oil, imports linked to energy exploration also jumped. Imports of tubes and pipes used in oil drilling in the Gulf of Mexico climbed 113 percent to exceed $262 million. When it came to petrochemicals, imports of acyclic alcohols – butanol and octanol – saw gains of 17 percent when compared with trade results in 2004.

Butanol has biodiesel uses. Germany has been blending increasing volumes of biofuel with conventional fuel, and it currently has biofuel-blend available for diesel vehicles. Octanol refers to primary methyl and ethyl alcohols such as methanol, which is used in the production of synthetic natural gas.

Nearly $75 million-worth of German tractors also turned up on the import list, a rise of nearly 10 percent from a year earlier. Imports of dishwashers weren’t far behind. They reached nearly $71 million, a leap of 81 percent compared with 2004 import figures.

Strong growth among top Houston exports helped boost overall trade last year. Synthetic rubber was the leading export in terms of dollar value. Houston shipped nearly $92 million in synthetic rubber to Germany, a gain of nearly 48 percent.

Medical equipment for surgeons, dentists and veterinarians hit $82 million, up 74 percent from a year earlier. And U.S. auto parts exports jumped 69 percent to close the year near $82 million.

Houston is also an export hub for regional jet parts. Those shipments rose to $76 million in 2005, compared with $39 million the year before. But the trade was two-way. Houston also imported more than $63 million-worth of regional jet parts from Germany. That was 57 percent above results for 2004.

The biggest export growth was seen in medical equipment used in physical exams. Those shipments jumped almost 130 percent in value to total $75 million.

German companies operating in Houston include Delta Steel, Oiltanking, Haltermann, Lufthansa, Berg Steel Pipe, Sueba, Schulz U.S.A, Schenker International, BASF Corp., Thyssen Steel, Siemens and Vahle.