The Bureau of Economic Analysis and the Census Bureau said that the U.S. trade deficit fell from $48.6 billion in November to $38.5 billion in December. This was the lowest deficit since January 2010, and it resulted from an uptick in goods exports and corresponding decrease in goods imports. Goods exports rose from $129.3 billion to $132.6 billion, and goods imports dropped from $194.9 billion to $188.8 billion. In December we also saw the surplus in trade services increase by $669 million to $17.7 billion.
Petroleum was part of the story, but not all of it. The petroleum trade balance declined from $23.4 billion to $18.7 billion. Petroleum exports were up by $926 million to $11.6 billion, and imports declined by $3.7 billion to $30.3 billion. Illustrating just how much this figure has changed, the petroleum trade balance was $29.9 billion in January 2012, suggesting a drop of over $11 billion throughout the year. The price of West Texas intermediate crude also dropped during that time frame from $100.24 per barrel in January to $88.25 a barrel in December. (It has since risen, averaging $94.69 in January 2013.)
Outside of oil, there were some positives in the goods markets. Most notably, the largest change occurred within industrial supplies and materials, with exports up $3.8 billion and imports down $4.2 billion. Outside of industrial supplies, the largest net winner was foods, feeds, and beverages (up $96 million). There were fewer net exports among non-automotive capital goods (down $431 million), automotive vehicles and parts (down $292 million), and consumer goods (down $240 million).
On the goods imports side of the ledger, there were declines across-the-board in all major categories except consumer goods, which eked out a gain of $43 million. Sectors with reduced imports – beyond industrial supplies – included automotive vehicles and parts (down $944 million), non-automotive capital goods (down $264 million), and foods, feeds, and beverages (down $75 million).
Overall, the bottom line was that manufacturers sold $1.02 trillion in goods in 2012, at the non-seasonally adjusted rate. This was an increase of 4.9 percent from the $971.7 billion sold in 2011. This suggests that U.S. businesses continue to find opportunities overseas, even as the pace of growth has obviously slowed with numerous headwinds in international economies.
Of course, it would take 15 percent annual gains in manufactured goods exports for the U.S. to reach its stated goal of doubling exports by 2015. While we were on pace for that in 2011, a number of headwinds globally – including a recession in Europe and slowdowns elsewhere – eased the growth of new export sales significantly in 2012. We have seen some progress lately in a number of regions around the world – with the notable exception of Europe, which continues to have issues. We are hopeful that a improving global growth will lead to better export figures in 2013.
Chad Moutray is chief economist, National Association of Manufacturers.