Premium #313 – The Coming Supply Chain Squeeze – Part II

The big two OEMs are facing an interesting situation.  Wide-body demand is down for several models, causing production cutbacks, while narrow-body backlog is at record levels.  The result is that the OEMs are relying on narrow-body sales for cash flow in the near term, and both OEMs will increase production rates to levels we believe will be unsustainable through the next decade.

Our forecast of aircraft production is shown in the chart below.