State’s 3rd-Quarter Exports Off 9.4% on Asia, Mexico Weakness

California exports slipped badly in the third quarter, reflecting both Asia’s economic disarray and a slowing in the crucial Mexican marketplace, according to data released Tuesday.

The state’s merchandise exports totaled $21.1 billion in the July-September quarter, a drop of 9.4% from the same period a year earlier, leaving the state down 3.3% so far this year.

Because of the state’s heavy reliance on Pacific Rim trading partners, a range of California firms, from computer makers to lumber haulers, have suffered disproportionately from the Asian economic turmoil, according to the data and several analysts. Exports for the nation as a whole declined about 3.9% in the third quarter.

The Asian market collapse helped make Mexico the state’s top export destination, as it squeaked past Japan for the first time, said Ted Gibson, chief economist for the state Department of Finance.

Even so, the growth in exports to Mexico slowed dramatically in the third quarter as the peso lost purchasing power against the dollar. Southbound exports posted a meager 3.4% increase for the period, contrasted with growth of 30% and 15% in the first two quarters of the year, respectively.

“That, to me, is one of the biggest risks for California,” said Howard Roth, a Bank of America economist, referring to Mexico’s vulnerability. “That really magnified the problem.”

Though U.S. and international officials have assembled aid packages to steady Asia’s debt-laden corporations and ailing banks--including a $10-billion regional package announced in Malaysia this month--any recovery is months or years away, analysts said.

Meantime, such firms as Power Clean 2000, a Los Angeles-based automotive equipment maker, are left to wait.

“Our exports to the Asian countries have stopped, basically,” said company President Candace Chen. “We’re hoping when the situation improves in a year or a year and a half, we’ll pick up. It’s hit us quite hard.”

Data from Japan, traditionally California’s biggest export destination, showed little change from the second quarter. Exports to Japan were off 17.5% from the year-ago quarter. Exports to South Korea, Taiwan and Singapore were in free fall.

Even mainland China, which provided Asia’s only bright spot recently, with growth of 30.9% in purchases of California products in the second quarter, posted a drop of 13.7% in the latest period from the year-earlier quarter.

“It suggests a little bit of a spreading of the Asian problem,” said G.U. Krueger, an economist with the California Assn. of Realtors who tracks trade data.

The numbers for Europe weren’t as bad, with California shipments to Western Europe up 6.8% in the third quarter, compared with the second quarter’s 8.6% rise, Krueger said.

Since the third quarter ended, some trade officials have seen anecdotal and market evidence that the Asian crisis may be slowly subsiding.

At the Port of Long Beach, the nation’s busiest, the number of outbound cargo containers rose 4.6% from September to October, suggesting that U.S. exports are on the rise, said Don Wylie, director of trade and maritime services.

But while “the economic signs are better,” Wylie said, “exports will probably still be in the tank [without] any improvement until the second half of [next] year.”