Long Term Perspective

Export demand picked up between 2002 and 2004, spurred by a sharp drop in the trade-weighted dollar. Even as the FX value of the dollar increased in 2005, export demand remained relatively healthy. In 2006, 2007, and the first half of 2008 both a weaker dollar and a pick up in overseas economic growth kept export growth strong. But the bottom fell out from under exports during the second half of 2008 and into 2009 as the recession deepened worldwide. But exports turned up in 2009 on a month-ago basis, lessening the year-ago decline.  The year-ago pace actually turned positive in 2010 and continued into 2011.  However, growth slowed in latter 2011 and early 2012 due to problems in Europe and deceleration in Asia.  Export demand depends both on the economic growth of our trading partners and on the value of the dollar.

Short Term Perspective

Year-on-year gains in exports turned negative during the past recession, based on weakened growth overseas.  But they largely have been on an uptrend since early 2009 and into most of 2011. However, merchandise export growth softened late in 2011 and into 2012. Exports rebounded 4.2 percent in September after a 1.5 percent dip in August and 1.6 percent fall in July.  Exports were up 3.8 percent in September on a year-on-year basis, compared to up 1.7 percent the prior month.  The dollar eased in September on temporary optimism about European debt issues.  The dollar was up 2.0 percent on a year-ago basis in September.