Expansion in Merchandise Exports, Imports and Trade Surplus in 1963
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January 1964 by Marie T. Bradshaw and Max Lechter Expansion in Merchandise Exports, Imports and Trade Surplus in 196B iN 1963 the surplus of merchandise Quarterly movements vious quarters. These earlier setbacks exports over imports,1 as reflected in After shipping strike adjustments to had pared imports to a rate of $16 the U.S. balance of payments, rose to the quarterly data, exports moved billion in the January-March period, $4.8 billion, some $500 million higher steadily upward from their recent low Data for October and November in- than in 1962. This improvement was of $20.1 billion at a seasonally adjusted dicate a continuation of imports at the the result of a year-to-year expansion annual rate in the fourth quarter of high third-quarter rate. in exports of about $1.2 billion (6 1962 to a record high of $22.2 billion in Some part of the increase in the value percent) and a concurrent gain in im- the third quarter of 1963. Exports in of imports in the third quarter of 1963 ports of about $700 million (4% percent). the final quarter of the year appear to reflect eft an advance in prices, which Merchandise exports in 1963 achieved have been even higher than in the boosted the index of import unit a new record for the fourth consecutive July-Sep tember p eri o d. values to the highest level since the year, reaching a total of approximately In the third quarter of 1963 imports end of 1961. $21.7 billion. Imports, totaling about climbed to a peak seasonally adjusted Continued high surplus ivith Europe. $16.9 billion in 1963, were also at a annual rate of $17.6 billion, an exten- The Nation's $2.2 billion, trade sur- new high, the second in succession. sion of the April-June recovery which plus with Western Europe during If adjustment is made for distortions had followed declines in the two pre- caused by the shipping strikes which January-October 1963 was about $100 million higher than in the comparable affected the latter part of 1962 and 7 period of 1962. In the first half of earl} - 1963, the $1,2 billion year-to-year MERCHANDISE EXPORTS, 1963 exports to that area moved above increase in exports would be raised to IMPORTS, and BALANCE the year earlier total while the corre- $1.4 billion and the improvement in the Export Surplus of About $ 4.8 billion in 1963 Was Somewhat Higher Than in 1962 sponding imports declined. Although trade surplus would be boosted to $700 As Export Rise Exceeded Import Gain opposite movements occurred during million. Annual totals for imports Billion $ the third quarter, the improvement in were relatively unaffected by the the balance with Western Europe was strikes. resumed early in the fall, when the The upswing in exports during 1963 year-to-year rise in exports far exceeded was dominated by agricultural com- the concurrent increase in imports. modities, fuel, and other basic in- During January-October 1963., the dustrial materials. This was in contrast export balance with Japan, which had to the gains in exports during 1961 and contracted sharply in 1962, also showed 1962, which had been concentrated in a 37ear-to-year improvement of some machinery, military equipment, and $100 million, as the recovery in ship- o ther fin al products. ments to Japan more than offset the The increase in imports in 1963 was still further rise in imports from that. source. largely in manufactured goods. 'Phis Based on data for the first 10 months development was also a departure from of 1963, the trade surplus with Can- the steep 1962 advance, which, follow- ada—which had declined in 1961 and ing the early recovery stage of 1961, again iu 1962—was up by little more was dominated by an upswing in than $50 million from a year ago. Al- industrial materials, and was reinforced though exports to Canada increased, by a large increase in food and other 1956 57 62 63* particularly after the middle of the goods. Quarterly Totals, Seasonally Adjusted, at Annual Rates year, imports from Canada also showed * Fourth Quarter: Estimated on the basis of October, a substantial rise. 1. Based on data for 11 months and partial data for November, and partial data for December. December. U.S. Department of Commerce, Office of Business Economics 64—1-22 The trade deficit with Latin Axnerka Digitized for FRASER 22 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis January 1964 January It KM SURVEY OF CURRENT BUSINESS 23 during the January-October 1963 period America continued to decline while the craft in 1963—the third annual drop in was somewhat greater than in the same corresponding imports edged slightly a row—reflected the fact that world period of 1962. Exports to Latin upward. demand for large jet passenger trans- ports had been very largely filled as a result of deliveries made in the previous 3 years. However, it is anticipated that the downtrend in aircraft exports will be reversed in 1964, when deliveries to foreign airlines are scheduled to increase Merchandise Exports by perhaps $75-$100 million. Deliv- eries during 1964 will include a number of short- to medium-range jet passenger Gains in Both Commercial and Government-Financed Shipments planes as well as the first exports by the U.S. aircraft industry of jet planes adaptable as cargo transports. Exports of utility and business planes are expected to continue upward. EXPORTS financed by cash payments Sales of finished goods flatten or commercial credits in the first 9 Slotver, more selective rise in ma- The termination during 1963 of the chinery months of 1963 rose to a seasonally ad- 4-year rise in exports of finished manu- justed animal rate of $18.7 billion, $540 factures (excluding finished industrial A more important development con- million higher than in the year 1962. materials) was due in part to circum- tributing to the flattening in total This increase was only moderately stances related to economic condi- exports of finished manufactures larger than the rise of about $460 mil- tions abroad. Commercial shipments during 1963 was a slowdown of the lion during the previous calendar year. of "special categoiy" commodities, rise in machinery exports. Whereas (See table 1.) which to a large extent are military the annual gains in exports of ma- The $2.7 billion annual rate of Gov- equipment, had been among the fastest chinery dining both 1961 and 1962 had ernment-financed exports during the growing components of U.S. export amounted to 9 percent, the increase in first three quarters of 1963 reflected trade in finished manufactures before January-September 1963 over a year an advance of $340 million over the 1963. They declined sharply during earlier was only about 3 percent. year 1962—a rise three times as great that year (see chart) as the responsi- (See table 2.) as the 1961-62 gain. bility for procuring and shipping such The rise in machinery exports during Although Government-financed ship- items was gradually shifted to the the past year, moreover, was very ments comprised only 7 percent of total Department of Defense, In the U.S. selective when compared to the broadly nonagricultural exports, they accounted balance of payments, shipments by the based advances of prior years. Con- for about 60 percent of the overall rise Department of Defense are classified as struction equipment and electrical ap- in nonagricultural exports in January- military transactions rather than mer- paratus were among the few types of September 1963 from 1962. chandise exports. Nearly four-fifths of machinery exports to show significant Total exports of agricultural prod- the overall drop in such commercial ex- increases: shipments of industrial ma- ucts were substantially higher than in ports reflected a reduction in shipments chinery, which had risen by nearly 1962, even though Government-financed to Western Europe. one-half over the course of the previous shipments of agricultural products in The decline in exports of civilian air- 3 years, were no higher in January- the first three quarters of 1963 were al- most unchanged from 1962. The share Table 1.—Changes in Government Financed l and Commercially Financed Exports of of Government-financed shipments in Agricultural arid Nonagricultural Products. 1960-63 total agricultural exports thus declined by a few percentage points, but still accounted for 28 percent of the total. Total exports Agricultural exports X on a gr icultur al exports Most of the 1963 rise in Government- Govern- ! ' \ Govern- j i Govern- Total i nient ! Other | Total nient j Oilier Tota] nient Other financed exports took place in the sec- financed { . , financed 1 financed ond quarter of the year, when these shipments spurted to a seasonally ad- A nnual eh angcs : 1960-61 +0.45 i +0.31 ! +0. 14 i +0.19 ': +0.09 +0. 10 + 0.26 ! +0.22 +0. 04 1961-62 . _„ _. +.57 +.11 +.46 ;, +.01 —.05 +.00 + .56 | +.16 +.40 justed annual rate of $3.3 billion. In 1962-63 ?. +.88 +.34 +.54 +.34 +.01 , +.33 . + . 54 +. 33 + .21 the third quarter, however, they fell Change from 1962 to III [ ! : - ' quarter 1963 at seasonally ! back to a $2.4 billion annual rate—only adjusted annual rate + 1.68 +.08 +1.60 1 +.40 i —.19 '. +.59 + 1.28 +.27 +1.01 slightly above that of 1962—while com- i 1. Financed by Government capital and grants. mercial exports of both agricultural and 2. 1963 based on January-September at seasonally adjusted annual rate. nonagricultural products advanced. Source: U.S.