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“If some of those orders were to be canceled, the Commerce Department would subtract them from the headline figure in the month in which they occur for the durable goods report,” Quinlan said, citing discussions with Commerce Department staff.
“That will not be sustained, not least because of the uncertainty generated by the grounding of 737 Max planes around the world,” Michael Pearce, senior U.S. economist for Capital Economics, wrote in a note Wednesday.
While Wells Fargo did not provide a specific numerical estimate for the impact to durable goods orders, the firm highlighted the heavy weighing of the 737 Max both for Boeing’s order book and for the aircraft category within the Commerce Department’s report.
Orders for the 737 Max have accounted for about 47.1% of Boeing’s bookings since 2016, according to Wells Fargo’s analysis.
Within the Commerce Department report, aircraft orders – which tend to be highly volatile on on a month-to-month basis – made up just under a tenth of total durable goods orders over the past year, the firm estimates. The readings on durable goods orders, in conjunction with other results measuring certain capital goods orders and shipments, provides a gauge of business investment and future growth.
“Considering the 737-Max aircraft comprises almost half of Boeing’s orders in the past few years the total negative impact to durables could be substantial if airlines hold off on new 737-Max orders the next few months,” Quinlan said.
A spokesperson for the Commerce Department was not immediately available for comment.
Potential cancellations
Despite the operational road bumps – which have already taken a toll on airlines whose fleets include numerous 737 Max jets – Boeing is not likely to face significant cancellations from its existing customers, Quinlan asserted.
“Cancellations tend to incur hefty penalties, and Boeing is working on a fix for the issue at hand,” Quinlan said. “In addition, multi-year backlogs at Airbus leave airlines looking to expand or upgrade aging fleets few alternatives.”
A grounded Lion Air Boeing Co. 737 Max 8 aircraft sits on the tarmac at terminal 1 of Soekarno-Hatta International Airport in Cenkareng, Indonesia. (Photographer: Dimas Ardian/Bloomberg via Getty Images)
https://www.theguardian.com/environ...t-plastic-pollution-un-conference-environment
“That will not be sustained, not least because of the uncertainty generated by the grounding of 737 Max planes around the world,” Michael Pearce, senior U.S. economist for Capital Economics, wrote in a note Wednesday.
While Wells Fargo did not provide a specific numerical estimate for the impact to durable goods orders, the firm highlighted the heavy weighing of the 737 Max both for Boeing’s order book and for the aircraft category within the Commerce Department’s report.
Orders for the 737 Max have accounted for about 47.1% of Boeing’s bookings since 2016, according to Wells Fargo’s analysis.
Within the Commerce Department report, aircraft orders – which tend to be highly volatile on on a month-to-month basis – made up just under a tenth of total durable goods orders over the past year, the firm estimates. The readings on durable goods orders, in conjunction with other results measuring certain capital goods orders and shipments, provides a gauge of business investment and future growth.
“Considering the 737-Max aircraft comprises almost half of Boeing’s orders in the past few years the total negative impact to durables could be substantial if airlines hold off on new 737-Max orders the next few months,” Quinlan said.
A spokesperson for the Commerce Department was not immediately available for comment.
Potential cancellations
Despite the operational road bumps – which have already taken a toll on airlines whose fleets include numerous 737 Max jets – Boeing is not likely to face significant cancellations from its existing customers, Quinlan asserted.
“Cancellations tend to incur hefty penalties, and Boeing is working on a fix for the issue at hand,” Quinlan said. “In addition, multi-year backlogs at Airbus leave airlines looking to expand or upgrade aging fleets few alternatives.”
A grounded Lion Air Boeing Co. 737 Max 8 aircraft sits on the tarmac at terminal 1 of Soekarno-Hatta International Airport in Cenkareng, Indonesia. (Photographer: Dimas Ardian/Bloomberg via Getty Images)
https://www.theguardian.com/environ...t-plastic-pollution-un-conference-environment
