Thread by @Brad_Setser

Have been trying to estimate the impact the extended grounding of the 737 MAX on U.S. exports ....

That isn't the most important angle obviously, but my ballpark math suggests it could be significant

(1/x)

marketplace.org/2019/04/01/bus…

The US (think Boeing) exported around $55b in civil aircraft in 2018 (that excludes the engines, and all aircraft parts). 737s were a significant part of that.

(2/x)

bea.gov/index.php/news…

Hard part is estimating exactly how much of that came from 737s.

The Boeing-Airbus wiki indicates Boeing delivered 580 737s. If 70% were exporters at an average price of $50m, that's $20b (plus the GE JV engines)

(3/x)

en.wikipedia.org/wiki/Competiti…

Exact price of a new 737 of course is a closely guarded secret, but it clearly isn't the list price. Implied price for the widebodies (from residual, assuming Boeing is $50 of $55b in exports) would be around $150m each

(4/x)

If my estimate is close to right, 737 exports are roughly as big as soybeans exports (tend to be around $20b a year). And soybeans obviously have gotten a lot of attention, as swings in soy exports have impacted the overall data.

(5/x)

Add in the GE-Safran engines (likely to be built in US for a Boeing, total engine exports were $50b) and 737s are a bigger business than 'beans.

(6/x)

Think Boeing is still making some old (next generation) 737s. Max is I think (from an article I found on line) now expected to be 80% of production, not 100%.

But will see a bigger fall off in aircraft than in 'bean exports

(7/x)

soybeans not sold to China could be sold elsewhere (tho at a discount) so fall off in exports wasn't 100%

that said, Boeing is adding to its inventory, so fall off in exports won't (for now) impact Q2 GDP

(8/8)