Bank of Korea: "Boeing 737 Max Production Halt to Impact US Economy"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] It has been analyzed that the United States' Gross Domestic Product (GDP) will be impacted due to Boeing, which has caused a production halt following a series of crash accidents.

On the 1st, the Bank of Korea stated in its 'Overseas Economic Focus' report, "Considering Boeing's significant position in U.S. manufacturing, the production halt of the 737 Max is expected to have a considerable impact on the manufacturing sector."

It added, "Recent indicators show that manufacturing output decreased in January, centered on the aircraft and related parts industries, and operating rates also declined."

As of last year, the aircraft and related parts industry accounted for 5.5% of manufacturing output, which is quite substantial. The export share of aircraft and related parts, based on customs clearance, is also high at 8.3% of total goods exports.

Major investment banks (IBs) such as Citigroup and JP Morgan estimate that the production halt of the 737 Max will reduce the U.S. GDP by 0.5 to 0.6 percentage points (annualized quarter-on-quarter) in the first quarter.

The Bank of Korea forecasted, "If the operation and production of the Boeing 737 Max resume, aircraft and related parts production and exports are expected to recover in the second half of the year," but also noted, "However, if additional defects are discovered, the resumption of operations may be delayed."

Boeing temporarily halted production of the model on January 21, considering increased inventory levels and uncertainties regarding the timing of the 737 Max's operational resumption.

This content was produced with the assistance of AI translation services.