Civil aircraft shipments relatively unchanged, but military spending rises by 15%
US aerospace industry sales this year are expected to be up by at least $12 billion over 2003, and the Aerospace Industries Association (AIA) is forecasting a similar increase for next year.
"At the end of last year we thought 2004 was going to be $1 billion better than 2003. Now we think it will be $12 billion better - and it could be $15 billion," says AIA chief executive John Douglass. "We are talking about $25-30 billion of aerospace and defence growth over two years."
Higher US defence spending is the major reason for the growth. While shipments of civil aircraft remain roughly unchanged at $35 billion for 2004, sales of military aircraft, engines, parts and services increased 15% to $46 billion; missiles by 10% to $14.8 billion; and space by 5% to $38 billion.
"These numbers show a healthy industry that continues to show strength and fortitude," adds Douglass. "The industry downturn after the terrorist attacks of September 2001 was relatively modest and thankfully shortlived."
Exports increased 6.5% to $56.8 billion, while imports declined for the third year, by 2.9% to $25 billion, giving the USA a positive aerospace trade balance of almost $32 billion. The decline in value of the US dollar was a major factor. "The dollar made US products a bargain," says Douglass.
US aerospace industry employment hit a 50-year low of just under 572,000 in February, but has begun to recover and more than 20,000 jobs are expected to have been added by year end. The ageing of the workforce is an increasing concern, with the industry struggling to attract new talent. "We are beginning to see shortages develop in certain areas," says Douglass.
Challenges for 2005 include the need to settle the dispute between the USA and Europe over government aid for Airbus and Boeing. "The USA is no longer a party to the 1992 Large Commercial Aircraft agreement," says Douglass. "We have to deal frankly and quickly with the dispute. We do not want a trade war."
The association is urging the second Bush administration to make good on its first-term promise to reform the cumbersome and confusing US export licensing process, which is "hurting US companies", Douglass adds.
The association is also on the alert for further moves to introduce "buy American" in Congress. "Such laws hurt the US industrial base," he says.
GRAHAM WARWICK / WASHINGTON DC
Source: Flight International
