How Much Does Boeing Play A Role In The US Economy?

Boeing, the largest civilian aerospace manufacturer in the United States, has long been a key cornerstone of the American economy, and in recent decades has been the US counterpart to the global civil aircraft manufacturing duopoly shared with Airbus. For decades, aircraft built by Boeing were the pride of America, as some of the safest, most efficient, and technologically advanced planes to ever take to the skies.

However, public sentiment towards Boeing has shifted significantly, and it is not in the company’s favor. Following two deadly crashes involving the manufacturer’s Boeing 737 MAX family of aircraft, the company’s reputation has taken a major hit, with extensive evidence pointing to a lax safety culture at the planemaker. With thousands of aircraft grounded, Boeing
struggled following the pandemic to continue meeting manufacturers’ expectations and failed to achieve its predetermined delivery targets due to continued regulatory scrutiny and supply chain delays.

At the start of last year, Boeing was dealt another major blow when a door plug blew off of a 737 MAX aircraft while in flight, a terrifying scene that was shared around the world on social media. While no passengers were injured as a result of the incident, the safety culture at Boeing was again called into question and the company was again forced to face the repercussions of having aircraft grounded and even more regulatory oversight of their operations.

By the end of 2024, confidence in Boeing, a company that had once been among the nation’s most successful, had reached a low point, but the planemaker was able to turn its fortunes in the right direction. During the last few weeks of 2024, Boeing received an order for up to 200 737 MAX aircraft from Turkish budget airline Pegasus, an order which brought new life to a struggling manufacturer.

A key question emerges regarding Boeing’s place in the American economy

In the weeks surrounding this major order, Boeing’s stock rallied. Share prices rose over 25%, demonstrating some of the highest levels of market confidence in the manufacturer in recent years. Amid layoffs and other cost-cutting measures, many industry observers were quick to conclude that Boeing was beginning to take many steps in the right direction.

Boeing has an interesting level of exposure to the United States economy as a whole, as the company sells aircraft to companies from across the globe, with US airlines representing a smaller portion of the plane-making business in comparison. According to Forbes, the Seattle-based manufacturer stands out as the largest individual exporter in the United States by dollar value, selling more products in foreign markets than any other US-based company.

As net exports are a key element of the gross domestic product (GDP) of the United States, which is used as one of the principal measures of long-term economic growth, the success of Boeing as a manufacturer will undoubtedly have some impact on the greater American economy as a whole. In this article, we will take a deeper look at the role that Boeing plays in today’s US economy.

Civilian aircraft manufacturing has always played a major role in the American economy

Since the end of the Second World War, during which manufacturers of military aircraft were forced to shift towards civilian airliner production, the United States has always been a leader in commercial aircraft manufacturing. In the decades following the war’s conclusion, companies like Douglas, Lockheed, and Convair also produced commercial aircraft alongside Boeing, and the jets they built would enter service across the globe.

For decades, US planemakers competed mostly with each other in international markets, with limited competition except from a few European manufacturers. In the Soviet Union, prohibitions on trade with the West led the country to develop its own civilian aircraft manufacturing industry. However, Soviet-built jets rarely made their way out of the USSR unless they were going to enter service with a satellite state.

By the time the 1970s came to an end, it was clear that Europe’s aerospace industry was going to pose a formidable challenge to that of the United States in the near future. The Airbus A300, a next-generation ultra-efficient widebody jet, demonstrated that multiple different European nations could collaborate to produce extremely capable passenger aircraft.

According to Airways Magazine, legacy manufacturer McDonnell Douglas was acquired by the Seattle-based manufacturing giant on August 1st, 1997, creating what was set to become the world’s largest aircraft manufacturer. Many even expected the new combined manufacturer, with production economies of scale working to its advantage, to become a far more competitive threat to Airbus than it was at the time.

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To Boeing’s credit, the manufacturer was able to deliver arguably the most successful widebody aircraft of the current century. With Boeing 787 Dreamliners selling faster than ever on account of their unprecedented range and efficiency, Boeing was able to lock Airbus mostly out of the market for small and midsize widebody jets.

In the 2000s and 2010s, it became extremely clear that Boeing and Airbus had established a duopoly in the aircraft manufacturing sector, one that would likely be difficult for any startup manufacturer (even a Chinese state-funded one) to break into. With new Airbus offerings like the A321XLR set to have a major impact on the market, Boeing, with the extensive issues it is currently facing, could be in trouble of sliding behind its major rival in market share.

Aerospace products are one of the nation’s most important exports

It would not be surprising for one to expect that the industries that account for the largest portion of United States exports will be energy or technology-related, and for the most part, this does happen to be the case. However, civilian aircraft (and the parts and components that are required to make them) actually account for an important portion of the US export economy. The following table includes more details on the largest exporting industries in the US economy, using Forbes data from 2022:

As we can see from this data, civilian aircraft play a fairly major role in the US economy, with the production of passenger airliners and other related components accounting for a larger portion of the US export economy than any technology-related industry. Only energy-related industries, such as gasoline or oil production, account for a larger portion of the US export market.

What might even be more interesting to analyze here is the fact that gasoline, oil, and liquid nitrogen production are industries dominated by a handful of players. When it comes to commercial aircraft manufacturing, however, there is only one player in town. There are companies such as General Electric, Pratt & Whitney, and Honeywell that manufacture components for both Boeing and foreign-built passenger jets, but when it comes to building the jets themselves, there is no other US manufacturer to have a significant impact on the market.

So what’s the bottom line when it comes to Boeing and the greater US economy?

Boeing, despite all of its woes, remains one of America’s largest and most influential companies. The company’s market cap (the value of all the shares in the firm) is around $127 billion, according to Yahoo Finance, and it has historically exported around $9-10 billion of aircraft to foreign nations.

Nonetheless, Boeing export figures have fallen since the pandemic, with many airlines turning to more reliable Airbus-built jets. The effects of a reduction in Boeing exports could be significant, as even a small decrease in total aircraft sold to foreign buyers could have a ripple effect across the entire US economy, due to Boeing’s large presence.