Boeing has revised its 20-year outlook up to reflect air travel resiliency and expected increased demand for its airliners.
In the week before the Bourger International Air Show in Paris, Boeing revised its Current Market Outlook 2013-2032, predicting a doubling of the international commercial fleet from the current level of 20,310 today to 41,240 by 2032. Removing retiring vehicles, Boeing predicted that 35,000 of these airplanes would be new, a value of $4.8 trillion. Considering the growing demand for fuel efficiency and the rising price of fuel, 24,670 of these airplanes are expected to be single-aisle aircraft seating between 90 and 230 passengers, while just 760 will be wide-body jets for more than 400 passengers.
The report also considered geographical dispersal for the growing commercial fleet. Asia-Pacific will account for 12,820 of the new orders, followed by Europe at 7,460. The United States will see a decrease in orders, due to airline consolidation.
“By 2032, Asia-Pacific will be by far the world’s largest travel market,” Randy Tinseth, vice president for marketing at Boeing Commercial Airplanes, told a news conference, as quoted by CNBC. “There is no doubt the industry’s center of gravity is moving from the U.S. to Asia. Right now, 37 percent of all traffic touches Asia — by 2032 it will approach 50.”
World airline traffic is expected to grow by 5 percent per year through 2032, while air cargo traffic, though recently dipping, will continue to grow at 5 percent annually as well.
Boeing faced a hiccup earlier this year when early flights in its 787 “Dreamliner” line suffered battery problems, resulting in the global fleet being grounded. After safety updates and federal approval, the 787 took to the skies again in early June.
Industrial Output Rises in Europe
The Eurostat data agency recently reported that industrial output rose 0.4 percent in the EU in April. This follows a 0.9 percent increase in March.
April output was down 0.6 percent compared to the same time last year. Still, IndustryWeek writes that the figures are “a huge improvement on performance in previous months and analysts said the latest report suggested the 18-month eurozone recession could be near its end.”
However, Howard Archer of HIS Global Insight notes that European manufacturing “is not out of the woods yet.” Overall, the economy has contracted for the past seven quarters. And while Germany, which remains Europe’s strongest economy, saw a 1.2 percent jump in industrial output, it is still being tempered by a 5.1 percent and 4.3 percent drop in production from Finland and the Netherlands respectively.
Survey: CEOs Slightly More Optimistic About Hiring, Sales
Chief executive officers of leading U.S. companies expect to add more employees and have slightly improved expectations for sales during the next six months than they did in previous months, according to a new Business Roundtable survey.
The latest CEO Economic Outlook Survey index, which reflects a composite of sales, capital spending, and employment expectations, rose from 81 percent in the first quarter to 84.3 percent in the second, indicating expansion. The Business Roundtable captured responses from 141 CEOs of companies that have over $7.3 trillion in annual revenues. On employment, 32 percent of CEOs surveyed between May 13 and May 31. indicated that they anticipate hiring, marking an uptick from 29 percent in the previous quarter, while 42 percent anticipate that employment will remain steady, down from 47 percent.
While 78 percent of CEOs anticipate company sales to grow over a six month period, (up from 72 percent), there was only a slight increase in forecast growth — from 2.1 percent from the first quarter to 2.2 percent. Over half (52 percent) expect spending to remain the same, an increase from 48 percent in the previous quarter while 11 percent anticipate a decline, dropping from 15 percent.
“Business performance continues to be relatively strong when compared to overall economic health,” said Jim McNerney, the chairman, president, and CEO of the Boeing Co. and chairman of the Business Roundtable. “The most immediate impediments to better performance continues to be relatively strong when compared to overall economic health. The most immediate impediments to better performance and a more robust recovery are well-known, but I would cite the continuing impasse over the U.S. government’s long-term fiscal path and an uncertain political environment as variables within the reach of government and political leaders to control.”
More Small Businesses are Exporting
Survey results from the National Small Business Association and the Small Business Export Association show a rise in exports among small business owners. Fifty-four percent of small businesses say their exports have increased in the past five years. The number has grown from 46 percent in 2010.
Canada remains the No. 1 country for U.S. businesses to export to. But China usurped the UK for the No. 2 slot. The latter came in third, followed by Mexico.
Businessweek reports, “Small business exports fell during the recession and are still recovering. Many owners refrained from exporting because of concerns about the risks and costs involved with selling overseas. And financing for exports became more difficult to obtain along with other types of business loans.”
Despite the increase, exporting remains a small revenue source for most small businesses. Among those small businesses that are not exporting, 46 percent said the main barrier was not knowing where to start. However, 63 percent insisted that they would export if their concerns could be addressed. That number up sharply from 43 percent in 2010.
Jobless Claims Reach Lowest Levels in Five Years
First-time unemployment claims fell 12,000 for the week ending June 8 to 334,000, according to the most recent data from the U.S. Dept. of Labor. It’s the first time initial claims have edged toward numbers seen prior to the start of the recession in 2007.
Advanced seasonally adjusted insured unemployment during the week ending June 1 rose slightly to 2,973,000, an increase of only 2,000. The four-week moving average declined by 12,750 to 2,967,250.
According to Reuters, economists see growth in confidence in the U.S. economic recovery, which “has led U.S. employers to exit a long cycle of elevated layoffs. Moreover, it has been difficult to discern any increase in layoffs due to Washington’s embrace of harsher fiscal austerity this year.”