California’s merchandise export trade fell 5.4 percent in October from the same month last year, according to a Beacon Economics’ analysis of foreign trade data released this morning by the U.S. Commerce Department.

California’s export trade so far this year is lagging behind last year’s pace by 3.3 percent.

“[October] was a disappointing month for the state’s exports,” said Beacon Economics’ Director of Economic Research, Jordan Levine. “Although the domestic economy continues to gain momentum, troubles abroad have contributed to difficulties for California exporters. California has also shed roughly 3,000 manufacturing jobs over the past year after seeing relatively positive numbers earlier in 2015.”

The state’s exports of goods to foreign markets in October totaled $14.70 billion, down 5.4 percent from the $15.53 billion recorded in October 2014. By way of comparison, overall U.S. merchandise exports fell by 10.2 percent over the same period, while exports from Texas shrank by 12.9 percent.

California’s exports of manufactured goods in October sagged by 1.4 percent to $9.46 billion from $9.57 billion last year. Exports of non-manufactured goods (chiefly agricultural produce and raw materials) tumbled by 21.7 percent to $1.86 billion from $2.37 billion the previous October.

Re-exports meanwhile dropped by 5.8 percent to $3.38 billion from $3.59 billion.

“With the economies of Canada, China and Japan—three of the state’s top four export markets—all slowing appreciably, October’s export numbers were less bad than might be expected,” said Jock O’Connell, international trade adviser at Beacon Economics.

Looking ahead, the Los Angeles-based trade research firm “finds reason to expect that the recent fall-off in California’s export trade will be reversed or at least moderated during the winter months.”

The firm “anticipates that shipments to Mexico and Europe will continue to grow and that exports to China will at the very least stop declining. In Canada, the economic policies of the new Trudeau government should give a boost to Canadian spending on imported goods, despite the country’s weakened currency.”

Beacon Economics’ optimism is tempered, however, by several other factors.

“The unprecedented surge of refugees entering Europe poses a range of social and security challenges for the continent that could have very far-ranging economic consequences in both the near and long term,” it said.

Similarly, it added, “having already claimed a Russian airliner, terrorist elements operating in the Sinai could disrupt shipping through the Suez Canal. Across the globe, friction over Chinese claims in the South China Sea could boil over into a military confrontation between China and the United States.”