Aviatinon Spending and the Economy

[Bill Greenwood]

Hows the economy and how's it affect aviation? Spending varies with the economy. EAA gen aviation is discretionary, the decisions to buy a new Garmin panel or new paint job or a new rating or add a T-6 or acro plane is of course based on wants more than need. My Bonanza still flyies pretty much the same, even with long overdue paint and an inst panel that I can actually read. But I'd like to have new, at least the paint. Pilots are more likely to transfer want into action if they or optimistic about income, jobs, even taxes, and we are in a positive trend now, not counting possible negative govt privatization. Even corp and airline spending is related to anticipated growth and needs. A corp may upgrade its jet to the latest and even companies and countries do. Boeing just got a huge Saudi order, think $15 billion over Airbus. And EAA attendance was up this year.

So is the economy and the forecast that good? Recall where we were in the recession 10 years ago, Stocks down maybe 40%, home foreclosures, business defaults and unemployment 10%, 30% for some groups. Now unemployment is 4.7%, stock market to 23,000 and lots of hiring especially for those with computer or other skills. Help wanted signs at many restaurants , hotels etc. Is this normal in history. Yes and even more so. Ken Fisher in USA Today charts largest recoveries. Current one only rates #7, up 21% so far. Biggest of all time was 2nd Clinton in 1996. And it is likely the circumstances more than the man,.2nd Clinton was only 10%, #9 rank. Roosevelt coming out of depression then war was #2 and 3., JFK #4. Another analysts has a measure of optimism at an all time high, maybe looking forward to some tax reform. Apple makes so much they can barely place it!
One caution note, hiring and especially higher wages dont hit all segments. I saw a talk by Bill Gates, and Buffet re competition from lower wage labor abroad, and Gates said that automation would have as big an impact, we are seeing it on car assembly lines. On a postive note, good effects spread, a worked gets recalled or hired and buys a new car or goes on vacation, the car dealer may hire more or the hotel or airline. and on to the next. By the way, Fisher may be a pilot not sure.