The Recovery Path of US Exports: Sector Analysis and Performance in the Year of Covid-19
Published by Gloria Zambelli. .United States of America Industries Export markets Foreign Market Analysis
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The availability of the latest export statistics from the US Census Bureau (see ExportPlanning US International Trade Datamart) about the fourth quarter of 2020 allows to analyze the performance of US exports by industrial sectors.
Overall, total U.S. exports fell to $1.4 trillion in 2020 (-14% compared to 2019). In particular, the most penalized sectors compared to 2019 are the following:
- Cars, transport and agricolture equipment (F3): -$55.68 Billion (-31%)
- Fashion Products (E2): -$22 Billion (- 28%)
- Components for Vehicles (D3): -$40.37 Billion (-28%)
- Fabrics and Leathers (B2): -$2.13 Billion (-20.5%)
- Industrial Raw Materials (A2): -$40.4 Billion (-16%)
- Metal Intermediate Goods (B4): -$4.68 Billion (-15.6%)
- Ceramics Glass and Refractories (B6): -$1.7 Billion (-15%)
- Industrial Plants (F5): -$2.8 Billion (-14%)
After the dramatic collapse recorded in second quarter (-26% YoY in USD), American exports recovered in the third quarter (-14% YoY in USD). The rebound of US exports did not stop during the last quarter of 2020, with a YoY fall “limited” to -9% in USD.
In the following graph the different industries are placed according to the Q4-2020 YoY rate of change of exports (on Y-axis) and the YoY rate of change recorded for the whole of 2020 (on X-axis). The size of each ball is proportional to the value of exports in 2019. In this way, it is possible to highlight the sectors that were characterized by a more significant rebound in the fourth quarter.
In Q4-2020 the most dynamic industries for US exports (calculated in terms of Year over Year growth rate) are the following:
- Natural Raw Materials (A1): +$1940 Million (+4%)
- Pharmaceutical and Medical Products (E4): +$720 Million (+3%)
- Electronic Parts (D1): +$450 Million (+2%)
- Furniture, Appliances and home decor (E3): +$50 Million (+1%)
Below we will provide an overview of the performance of the main sectors of American exports.
As we have seen, during the pandemic crisis US exports of Fashion Products were among the hardest hit, dropping by almost 30% compared to the values of the previous year. Looking closer, we can actually see that this negative trend had already begun in 2019, when exports of the sector fell by 4.7% in USD YoY; it therefore looks like the pandemic might have exacerbated a trend that was already in place. In spite of being one the most penalized sectors, the fashion industry has nonetheless recovered in Q4, compared to the trough reached in Q2; according to our estimates, foreign sales of Fashion Products are estimated to have closed the latest quarter of 2020 with a loss reduced to 12%, YoY.
Despite the negative performance of this industry, several others industries in the field of consumer goods (e.g. Consumer Packaged Goods, Packaged Food and Beverage, Unpackaged Food) proved quite resilient in 2020, due to their status of necessary goods: thier exports have therefore been little affected by the pandemic.
Against this backdrop, Pharmaceuticals and Medical Products was one of the best performing sector among consumer goods in Q4-2020; the whole of 2020 was not dramatic, as well, with a contraction of US exports limited to 2% YoY, in line with the emergence of new consumption trends and the necessary increased attention of consumers towards health-related items.
In a context of overall unfavorable demand, exports of Cars, transport and agricolture equipment were hard hit by the pandemic market crisis, after a weak growth recorded in 2019 (+1% in USD compared to 2018). This industry is one of the most important sectors of specialization of American exports and it represented 11% of total US exports in 2019. During the last quarter of 2020, foreign sales of Cars, transport and agricolture equipment was still heavily into negative territory, with an estimated contraction of 23.6% YoY. On the other hand, US exports of Machinery (F4) in 2020 actually showed a recovery (+4% YoY), after the decline recorded in 2019 (-11.6% YoY). However, this very good performance appears to have stopped in the fourth quarter, which recorded a contraction of 1.6% YoY.
In line with the decline recorded by the automotive industry, US exports of components for vehicles collapsed, as well, during the pandemic crisis. After a slightly negative performance in 2019 (-1% YoY), during 2020 US exports of components for vehicles fell by 27.7% compared to 2019. In the last quarter of 2020, the fall of exports in this industry still looks deep, with an estimated loss of 23% in USD YoY.
On the other hand, the industry of Electronic Parts showed a greater resilience during the year, compared to other intermediated goods. In 2020, US exports of this industry marked a weak decline of -1% in USD, while showing a gradual recovery in the last quarter of 2020 with a 2% growth compared to the corresponding period of 2019.
Last but not least, Raw materials are a significant component of US exports: overall, this industry represented 25% of total US exports in 2019. During the last year, US exports of Industrial and Natural raw materials fell respectively by 16% and 5% YoY, in line with the general industry paralysis seen in the countries affected by the pandemic. In Q4-2020, however, US exports of Natural Raw Material showed quite a remarkable rebound, growing by 4% YoY in USD.
Conclusion: top US export specialization sectors
After an overview of the latest dynamics of US exports, the following graph takes a comparative approach to show changes in terms of weight of the top US export industries (excluding Industrial and Natural raw materials) on total foreign sales, from 2011 to 2020.
As discussed above, the Automotive macro-sector (Cars, transport and agriculture equipment, Components for Vehicles) is extremely strategic for US exports and it is also the sector which lost the most weight on total US exports during 2020. Instead, the sector of Electronic Parts and the Health Sector (Pharmaceuticals and Medical Products, Fine Chemicals and Specialties) raised their weight on total of US exports. This result confirms the change of international consumption trends caused by pandemic crisis.