Industrialists forecast continued growth in business, but warn of offshore threat country’s US dominance of sector
Leading US space industrialists are predicting a surge in business, but have warned that the nation’s market lead is under threat from a technological and labour base that is moving increasingly offshore.
Buoyed by continuing high levels of mostly US government-sourced defence and communications work, as well as a rise in commercial satellite orders, the overall global space business for 2004-05 is valued at about $60 billion, estimates launcher specialist Orbital Sciences.
“The US government represents around 75%, while other national governments contribute some 17% of global demand,” says Orbital chairman and chief executive David Thompson. Commercial satellite business is expected to represent about 8%, he adds.
Over the next three to four years, Orbital predicts a slowdown in the frenetic pace of US government spending on national security, missile defence and strategic and tactical defence systems, but it still anticipates continued growth.
It believes the world market will grow by one-third to around $80 billion by 2008. US military spending, which currently accounts for some 55% of space and rocket-based product procurement, is expected to slow substantially.
“Missile defence systems, which have seen torrid growth averaging 20% plus per year, will slow down to between 6-8% over the next three to four years,” says Thompson. Strategic and tactical missiles will slow from the 5-6% rates of recent years to 3-4% over the same time period, he adds.
Government civil space work, including human space systems, is forecast for “robust growth”, the latter area tipped for 10% plus per year for the rest of the decade. Commercial satellites, which have seen only about 33 new orders in the past three years, are tipped for a new revival.
Speaking at the AIAA Space 2005 conference in Long Beach, California, Thompson said: “The good news is that in the 2005-07 timeframe, we expect something like 60 new orders, or a two-fold increase to around 20 a year.”
Bernard Schwartz, chairman and chief executive of Loral Space & Communications, which is re-emerging from bankruptcy, said: “In commercial satellites, we think there will be 20-25 new orders this year worldwide, which compares favourably with the good times of the late 1990s and early 2000s.”
But the industrialists warn the USA’s lead is threatened by internal and external challenges. A key concern is globalisation, says Ball Aerospace chairman and chief executive David Taylor. “We are an insular industry and I am concerned about our source of supply. All our foundaries for FPGAs [field programmable gate arrays – widely used in space applications], for example, are overseas, and technology is moving, or has already gone offshore.
“Then there is the problem of a viable workforce. The labour force is offshore, and if we don’t get the labour base here energised, then not only will the technology be moving offshore, but so will the labour force.”
GUY NORRIS/LONG BEACH
Source: Flight International
