Exports’ volume not issue; it’s their value
In 2013, with some fanfare, Houston rode a wave of petroleum products to overtake New York City as the nation’s top exporting metro area. The Bayou City sent more than $110 billion in goods to other countries, with chemicals providing a boost as well.
Houston continued its upward trajectory for a couple years, hitting a high of $118 billion in 2014. And then, well, you know what happened.
The oil bust took a big chunk out of the value of Houston’s exports in 2015: They’re down 18 percent from the previous year, according to the International Trade Administration. But in a demonstration of what’s been dragging down the U.S. economy in recent years, with the exception of Seattle, the other top five exporting metros also dropped as well — allowing Houston to stay on top by a whisker.
The decline in the value of petroleum products and oil and gas accounted for 60 percent of the decrease in Houston, according to the ITA.
But that doesn’t mean the city is actually exporting 18 percent less stuff. On a tonnage basis, foreign sales of plastics have actually increased, as have crude oil and pe-
troleum exports from the Gulf Coast generally. It’s the price that’s decreasing — and thus the value of exports overall.
“We’re shipping more refined products overseas, but what we can get for those refined products is down significantly,” says Patrick Jankowski, chief economist at the Greater Houston Partnership. “We’re in a global commodities glut, and we have to accept what the global market is paying.”
That also applies to agricultural products, like corn and soybeans. In terms of actual volume, it also affects exports of oil field equipment, since the rest of the world is pumping less as well. And on top of the global oversupply of commodities, U.S. manufacturers have been battling the U.S. dollar’s rising value, which makes their goods and services more expensive overseas.
It’s why, adjusted for inflation, U.S. export numbers haven’t been looking too hot lately.
Judging by that uptick in the last quarter, however, it’s possible that services exports — anything that’s sold by the billable hour, like architecture and legal help — could be rising. Those aren’t broken down by the metro area, so it’s hard to know how Houston stacks up against the financiers of New York and the blockbuster movies of Los Angeles. But Houston has a lot of engineers, so it’s likely it’s no slouch on that side of the trade equation.