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Looking ahead

August 2nd, 2006

Looking ahead

In only three months the first quarter of 2006—South Florida’s trade landscape is starting to see changes.

For starters, South Florida now imports more from China than any other nation, according to WorldCity’s analysis of U.S. Census data for January, February and March 2006. That means the Asian powerhouse has displaced long-time No.1 import partner Brazil at least for the moment.

The trade-partner shift came against a backdrop of total trade worth $17 billion, a jump of more than 11 percent when compared with the first three months of 2005.

The first quarter 2006 tally set South Florida on its way to an even bigger trade surplus than the $2.2 billion registered last year. The Miami Customs District exported $9.3 billion-worth of goods in the first quarter, a jump of 19 percent, while importing $7.8 billion, a gain of 3 percent. The resulting trade surplus of $1.5 billion compared with just more than $250 million in the first quarter 2005.

Although imports from Brazil declined in the first quarter, the South American country remained South Florida’s top trade partner overall, as measured by the combined value of imports to and exports from Brazil. And South America’s biggest economy remained the leading destination for exports through the Miami Customs District. Those shipments to Brazil reached $1.5 billion, up 25 percent from the same period last year.

On the imports side, gasoline and clothing from Central America and China continued to top South Florida’s import roster through the first three months of the year. Imports of gasoline and other refined products through Port Everglades rose 70 percent, to $91 million, although various important categories of apparel imports dipped slightly in value.

Imports from China increased 10.5 percent to close the quarter at $779 million, well above the $492 posted for Brazil during the same period. China’s gradual economic reforms have opened the economy to international trade and investment and have made it one of the fastest growing in the world, with a nearly nine-fold increase in GDP per capita since 1978, according to a WTO Secretariat report on the Asian countries trade policies and practices.

Although China sits at the top of the import lineup, the real story is Brazil’s imports, which plummeted more than 45 percent over first quarter. South Florida’s trade with Brazil can be volatile as it is led by big-ticket jet imports from Embraer.

The Brazilian aircraft maker is one of the world’s two leading manufacturers of so-called regional jets, along with Canadian company Bombardier. Miami’s aircraft imports fell nearly 64 percent for the first three months of this year.

However, Brazilian officials in Miami say jets were not the whole story. Since WorldCity tracks trade by its value, rather than its volume, currency exchange rates also came into play.

Beyond the China-Brazil tussle, Venezuela continued to entrench itself on the trade partners list, holding fast to the No. 2 position it grabbed in 2005. Oil imports from Venezuela accounted for nearly $225 million, or 25 percent of South Florida’s energy imports for the first three months of the year. That represented a nearly 24 percent jump from the same three months in 2005.

Exports to Venezuela were also on the rise, gaining 22 percent, largely behind a jump in shipments of construction equipment to the South American country.

Computer products dominated first quarter exports. South Florida shipped nearly $694 million-worth of computer parts in the first three months of 2006, a 51 percent jump from the same period in 2005. Most were headed to Brazil, Costa Rica, Venezuela and Colombia.

Computers were the second most valuable export, totaling nearly $607 million a 25 percent hike from the first quarter of 2005. The single biggest destination receiving nearly $105-million worth was Paraguay. That was a 61 percent increase from the same period a year earlier. Shipments to Brazil, meanwhile, rose 13 percent to nearly $88 million. Venezuela received just more than $65 million in computer parts from South Florida while exports to Colombia reached $63 million.

Computers and computer parts have been alternating in the export roster’s top two spots since 2003. South Florida also exported nearly $351 million in computer chips from January to March, an increase of 13 percent.

Outside of technology, the Customs district exported $672.4 million in airplane parts in the first quarter, a gain of 33 percent. Those shipments were split between two commodity categories: $356.4 million-worth of aircraft parts and $316 million-worth of regional jet parts.

Among top export products, heavy construction equipment saw the biggest increase more than doubling from the first quarter of 2005 to exceed $104 million. Most of that equipment went to Venezuela, where a construction boom is underway, largely as a result of public works projects. For the first quarter of 2006, construction equipment exports to Venezuela neared $21 million a colossal gain from the $2.9 million in construction equipment exported in 2005.