In 2020, millions of Americans suddenly altered their travel habits, canceled vacations, and worked and learned from home. Data from the Census Bureau’s most recent Quarterly Financial Report (QFR) can help identify some of the effects from these sweeping changes. And in this three-part series, the FRED Blog looks at how Americans’ stay-at-home measures affected profits for two industries:
- transportation equipment manufacturing (NAICS 336), which includes
- aerospace products and parts manufacturing (NAICS 3364) and
- motor vehicles and parts manufacturing (NAICS 3361, 3362, 3363)
- petroleum and coal products manufacturing (NAICS 324).
The FRED graph displays data on the net income or loss (after taxes) for the transportation equipment manufacturing industry. In the first quarter of 2020, transportation equipment manufacturing companies recorded after-tax profits of $4.1 billion, which was $13.7 billion lower than the first quarter of 2019 and their lowest reported quarterly profit in roughly a decade. From the first to second quarter of 2020, profits decreased $11.8 billion, leading to a $7.7 billion loss. The last time transportation equipment manufacturing companies reported a net loss was during the second quarter of 2009 (the final quarter of the Great Recession, shaded in the graph).
Some areas of the transportation equipment manufacturing industry earned profits during the second quarter of 2020. However, those gains were offset by losses in two sectors of that industry: –$3.2 billion for aerospace products and parts manufacturing and –$4.8 billion for motor vehicles and parts manufacturing.
The transportation equipment manufacturing industry overall earned $15.1 billion in profits in the second quarter of 2019. A year later, it lost $7.7 billion (a decline of $22.9 billion). To put that in perspective, during the Great Recession, the transportation equipment manufacturing industry sank by $34.5 billion between the fourth quarters of 2007 and 2008. It took a total of five quarters for the industry’s profits to rebound.
A quick historical recap: The Great Recession began in the first quarter of 2008, bottoming out in the fourth quarter that year. In the third quarter of 2009, the transportation equipment manufacturing industry began showing a profit for the first time since the recession began, and profits returned to pre-recession levels in the first quarter of 2010. Since then, the industry logged 41 consecutive quarters of profit, before the pandemic hit.
The latest QFR shows profit in the third quarter of 2020 crossed back into the positive, rising to $17.8 billion, highest profit since $18.9 billion in the third quarter of 2019.
Check back on December 14 for the next post in this series, which looks at the petroleum and coal products industry.
About the U.S. Census Bureau: The U.S. Census Bureau collects data from thousands of companies to create monthly, quarterly, and annual reports for U.S. policymakers. These reports are free to the public and provide critical insight into the U.S. economy. To view all the Census Bureau economic indicator reports, visit the Briefing Room.
How this graph was created: Search for and select “Quarterly Financial Report: U.S. Corporations: Transportation Equipment: Income (Loss) After Income Taxes.” To change the line color, use the choices in the “Edit Graph” panel’s “Format” tab.
Suggested by Brooks Hurry and John Darr from the U.S. Census Bureau.