The buoyant aerospace industry's ability to shrug off the effects of the delays to the A380 programme and the other woes at Airbus is reflected in our latest Aerospace Trends Survey, carried out with PricewaterhouseCoopers. The airframer's problems may have spooked the financial markets and proved how quickly fortunes can change in aerospace, but levels of confidence at the vast majority of the industry's major players are riding almost as high as they have ever been since we launched the survey almost four years ago.
Our regular sample of 40 of the industry's biggest 100 companies worldwide - now conducted half-yearly rather than quarterly - shows businesses are even more positive about the future than they were six months ago. Production backlogs are as strong as they have been for some time and the outlook for jobs is also good.
Our 40 respondents were last asked these same questions in the first quarter of this year, before the Airbus difficulties came to light. Although most of the companies questioned - a selection from our Top 100 aerospace companies by revenue - are not Airbus suppliers, the effect of such a high-profile delay might be expected to be felt across the industry. Not so: if anything, the mood of our companies is even more upbeat than it was either at the end of last year or in the first quarter of 2006.
Our first question asks if companies are more confident today about their business's prospects than they were three months ago. Nineteen of the 40 respondents say they are more confident, while 21 say their optimism is about the same as three months ago. None say that their confidence has fallen.
To find our index for this question, we subtract negative responses from positive ones (ignoring neutrals) and express it as a percentage out of 40. That gives us a net figure of 48%, more than twice the quarter one total of 23%. Because the question tracks relative rather than absolute sentiments, compared with three months previously, every positive figure represents a rise in optimism across the industry.
Our second question asks if orders in the period in question have been stronger than, weaker than or the same as the same period last year. Twenty-five of our 40 companies report that they have had a better six months, with none of our respondents saying that things have got worse. This gives a net figure of 63%, slightly up on the total recorded at the last survey in April.
And when it comes to job prospects, companies are still looking to recruit, with 16 of our respondents saying they expect to take staff on during the next 12 months compared with 24 who say workforces will stay the same and none planning to shed staff, giving a net result of 40%, compared with 30% in April.
According to Neil Hampson, a partner with Pricewaterhouse-Coopers, this is due to the "general ramping up of production" in the industry. It could also indicate that the recent trend towards outsourcing has run its course, with all the work that can be done efficiently by outside suppliers having been hived-out, and businesses now looking to bring design and procurement staff in-house.
The Airbus effect - though high-profile - has had remarkably little impact on Top 100 manufacturers, says Hampson. None of the companies surveyed mentioned the A380 delays or management upheavals at Airbus and EADS as signs of a wider impending downturn in the industry. "The setbacks at Airbus have not greatly affected the companies," says Hampson. Most of them have a reasonable portfolio, so there has not been any one particular negative in terms of the overall results."
As usual, there is little significant divergence in responses between regions or between those specialising in the defence or civil markets, although the more positive outlook from North American companies - 11 out of 17 say their confidence about their business's prospects has improved - perhaps indicates the greater reliance of European companies on Airbus. Only six of the 18 Europeans say their confidence has risen, with the remainder recording neutral responses.
Similarly, Asian companies are more optimistic than they have been in the past, notes Hampson, with two of our five "rest of the world" businesses - both Asian component manufacturers - reporting rising confidence. Hampson says this is probably down to links between Boeing's civil aircraft division and Japanese industry, now that the US manufacturer is thriving.
The Flight International/PricewaterhouseCoopers Aerospace Trends Survey polls the same 40 companies each six months (previously quarterly) and asks the same three questions. All of them are among the Top 100 companies by revenue, as ranked by both organisations. They represent airframers and systems integrators, as well as component and systems manufacturers.
Source: Flight International
