Analyst Opinion by Justinas Liuima - Industry Analyst
On 30 September 2013, the US Congress failed to reach an agreement on
budget allocation for the 2014 financial year, meaning a partial
shutdown of some government services. Such situation could have
far-reaching consequences for the US economy. What implications will
this have on the aircraft and spacecraft industries?
The situation looks like a déjà vu of the government
shutdown in 1996. Back then, the government shutdown continued for 21
days after politics failed to reach an agreement on funding of public
institutions. The cost of this stalemate situation was US$2 billion,
according to the White House Office of Management and Budget.
The full impact of this recent government crisis is not fully known
yet. According to initial estimates, a government shutdown could cost
US$300 million a day, a fraction of the US economy of US$15.7 trillion.
However, such a situation is likely to heavily influence industries
largely dependent on defence sector and government spending, such as
aircraft and spacecraft.