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10 Things to Know About the Latest International Trade Data

Summary of the Latest Data

  • U.S. exports punched ahead after stalling a bit. Faster export growth means faster job creation for Americans. Many tech companies like Apple do more businesses abroad than at home.
  • Imports are not rising. America’s energy boom has led to less need for imported oil. A foreign company like Airbus desires to produce in the U.S. (Mobile, AL), which also helps to limit imports.
  • On net, the trade deficit as a percentage of GDP is near 15-year lows. That’s a good trend.

Impact on the Market

  • International trade requires warehouse facilities so the demand for commercial industrial spaces will be rising a bit. SIOR members should get ready for more business. Vacancy rates of industrial buildings, however, are elevated so the ability to extract higher rent will be difficult.
  • Increased international trade means more demand for housing by foreigners. For example, both rental and home purchase demand in Nashville, TN is being driven partly by Japanese managers of the Nissan plant in the area. REALTORS® should engage the human resource division of foreign companies regarding housing matters.
  • The top exporting destinations for American exports are Canada and Mexico. Growth is faster to Mexico than to Canada in recent years. Interestingly, exports to the EU have not been growing, while exports to Russia have been growing. Therefore, economic sanctions on Russia will hurt.

Data Details

  • Exports were 4 percent higher from a year ago while imports grew by just 1 percent.
  • But overall imports are still larger than exports, so the trade deficit continues even as the deficit gap is narrowing. The latest quarterly deficit was $81 billion, compared to $102 billion a year ago.

As an Aside

  • International trade will grow and grow. Some are worried that international trade means jobs will be lost. Others see it as an opportunity to expand market not only to U.S. consumers but to the whole world.
  • One way to prepare for the world is to learn the language for the purpose at hand. The global business language today is English. But Americans should not simply relax but expand and perfect the language skill. Everyone in Singapore and the Netherlands speaks English very well (as a second language) and their income is one of the highest in the world.  Long ago, a minor German princess studied through the wee hours to learn a key second language of her day: Russian. She wanted to be powerfully influential. The Tsarina Catherine the Great then expanded Russian territory by defeating the Ottoman Turks in Crimea. That is why most people of Crimea seem to indicate a closer connection to Russia than to Ukraine.

Lawrence Yun, PhD., Chief Economist and Senior Vice President

Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.

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