For many Texas ports, 2021 looks like a record year – for now
What surprised me when I looked over the recently released U.S. Census Bureau data for Texas was how many border crossings have trade totals at record levels.
While a few seaports and an airport or two do as well, it’s really border crossings that are shining, according to data released Friday, which covers the first five months of the year.
That can only mean one thing: U.S. trade with Mexico must be up.
And it is, up better than 30 percent over the first five months of 2020. That includes of course, the two dismal months of April and May, as the pandemic put the brakes on just about everything, including brake imports.
My guess is not all of these will finish the year with records – I will explain why in a moment – but those running at a record clip include:
There are other, smaller ports at record levels, those with less than $1 billion in trade through May, such as border crossings in Rio Grande City, Roma and Fabens as well as Addison and Sugarland airports.
Before I explain why some will likely fall below their record pace before year’s end, it’s important to understand the two primary factors driving these ports’ trade.
The first is that millions and millions of Americans are flush with cash, thanks to a massive federal infusion of money into their pockets and purses last year and into this year. It was an effort to thwart economic collapse at the hands of the coronavirus pandemic that struck last spring.
That is driving U.S. imports, many of which come from Mexico through Texas.
The second is rising energy usage and demand in Mexico, which means more natural gas, largely through pipelines and, again, largely through Texas.
Those two are not entirely unrelated.
Presuming the red-hot U.S. economy slows as the impact of cash infusions through unemployment and PPP loans diminish, it will certainly slow the imports from Mexico. That, in turn, will almost certainly slacken the Mexican demand for energy, much of which has an industrial use.
Also, recall that after a dismal spring, particularly in April and May, U.S. trade started to rebound in the second half of 2020. What appeared at this time last year to be a catastrophic decline in U.S. trade for the year ended up being just a somewhat crummy year.
So keeping pace will become more challenging for this reason as well.
Let’s hope I am wrong and, if not, let’s at least enjoy the moment. If the last 18 or so months have taught us nothing else, it should have at least taught us that.