Aviation manufacturing has long been a dominant industry in the United States in terms of contribution to GDP and exports, simple due to the impact of big ticket items on economic data. The production of aircraft and follow-on industries employ tens of thousands of Americans and are a source of national pride, hence the efforts by the EU, China, Russia and others to develop their own aviation industry at the expense of Boeing's dominance.
Boeing obviously lost their way. Long known for reliability and yes, safety, the company has suffered mightily in this regard with the 737 Max saga. President Trump was right to ground the aircraft last year when evidence emerged of serious safety issues, and Boeing's board of directors was right to fire CEO Dennis Muilenburg. He should have been removed a long time ago for as in the military, if there is failure at the top and people die, there needs to be accountability, quickly.
Evidence emerged this week of the impact of Boeing's problems on U.S. economic data.
U.S. Durable Goods Orders ex Transporation (Nov) printed at 0.0% vs 0.2% consensus estimate.
U.S. Durable Goods Orders ex Defense (Nov) printed at 0.8% vs 0.0 consensus estimate.
U.S. Durable Goods Orders (Nov) came in at -2.0 vs 1.5% estimate.
U.S. Non Defense Capital Goods Orders ex Aircraft (Nov) printed at 0.1% vs 0.2% estimate.
In other economic news this week, New Home Sales (MoM) (Nov) came in at 0.719M vs .734M estimate.
New Home Sales Sales Change (MoM) (Nov) printed at 1.3% vs -0.3% expected.
One can see clearly that U.S. Durable Goods were relatively strong ex Defense and Transportation, showing the impact of Boeing's slowdown.
China especially is licking their lips over Boeing's problems and would like nothing better than for the company to entire a downward spiral.
Hopefully new CEO David Calhoun can right the Boeing ship and set the company up for continued long-term success. This symbol of American economic power needs to be fixed...and soon.
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