
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, April 20, 1994                   TAG: 9404200094
SECTION: BUSINESS                    PAGE: B-7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

TRADE DEFICIT WORST IN 6 YEARS

The U.S. trade balance deteriorated sharply in February as a big drop in sales of airplanes, computer chips and pharmaceuticals contributed to America's worst merchandise trade deficit in six years, the government said Tuesday.

The Commerce Department said the deficit in goods and services widened unexpectedly to $9.71 billion in February, 46.1 percent higher than January's revised deficit of $6.64 billion. Many analysts had been looking for the deficit to show a slight improvement.

The deterioration came from weakness in both exports and a big jump in imports. Merchandise exports fell by $1.36 billion as foreign demand weakened in a number of areas. At the same time, merchandise imports shot up by $1.17 billion, reflecting higher shipments of oil and cars.

Analysts said the weakness in exports was the most troubling part of the report, pointing to the fact that American manufacturers are going to have a tough time this year because of sluggishness in many overseas markets.

``U.S. export growth came to a shuddering stop in February,'' said Stephen Cooney, senior policy director at the National Association of Manufacturers. He said a big drop in sales to Europe was ``particularly frightening,'' because this area had been one of America's top export markets.

Economists blamed recessions in Germany and other European nations and Japan for the weakness and said things were not likely to show much improvement until next year.

The February trade report marked the second month that the government has included services in its monthly trade data.

However, for February, the services surplus slipped 11.2 percent to $4.18 billion. The government blamed the deterioration in part on network television payments for broadcasting the Winter Olympics plus an increase in U.S. travel to Norway to see the games.

U.S. merchandise exports dropped 3.5 percent to $37.17 billion. Sales were weak across the board, with the declines led by aircraft, down $504 million; computer chips, down $153 million; and drug sales, down $114 million.

Imports jumped 2.4 percent to $51.05 billion, the second highest level on record. America's foreign oil bill shot up by 5.8 percent to $3.23 billion, while foreign car shipments climbed 4.2 percent to $8.82 billion.

by CNB