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Thursday, December 19, 2013

Aerospace Sales Projected at $232 Billion for 2014

Woodrow Bellamy III 

Military spending cuts offset the increase in sales for commercial aircraft leading to a slight reduction in overall aerospace sales for 2013, however demand is expected to increase leading to an overall gain in 2014, according to the year-end forecast released by the Aerospace Industries Association (AIA) on Wednesday, Dec. 18. 
 
The forecast projects a less than 1 percent drop in overall aerospace sales to $220 billion for 2013, down from $222 billion in 2012. However AIA is projecting a 5 percent increase to $232 billion in 2014, with the uptick coming mostly from strong civil aircraft sales growth.
 
Civil Vs. Military Aircraft
 
Civil aircraft sales were projected to rise 7.7 percent to $67 billion this year from 2012, according to the report, but those gains are offset by a drop in military aircraft sales, as well as declines in missile, space and other aerospace sectors. 
 
"Significantly, a nearly $5 billion increase in civil aircraft sales was offset by a nearly $4 billion decrease in military aircraft sales, and a $2 billion decline in civil and defense space sales," said Marion Blakey, president and CEO of AIA, referring to aircraft spending in 2013.
 
"We believe strong civil aircraft sales growth and an uptick in the space sector will contribute to a total of roughly $232 billion in sales next year," Blakey added. 
 
Despite the projected slight decline in sales for 2013, U.S. aerospace exports increased by $12.5 billion resulting in a $75.3 billion favorable trade balance for the industry. Sales of civil aircraft, engines, avionics and other components accounted for 88 percent of aerospace exports, according to AIA's forecast. 
 
In 2014, civil aircraft will once again lead the industry as AIA projects an 8 percent increase to $72.1 billion driven by higher sales of general aviation aircraft. AIA is projecting GA shipments to reach 1,661 units valued at $10.2 billion for 2013 and those numbers are expected to increase to 1,801 units worth $11.3 billion next year.
 
Unmanned Aircraft Systems
 
Finally, the group also addressed the growth of unmanned aircraft systems (UAS) for both military and civil use. AIA expects UAS spending to "nearly double over the next decade, from $6.6 billion to $11.4 billion on an annual basis," according to the report.
 
The FAA recently released its "UAS Roadmap," outlining the regulatory standards, policies, certification and operational procedures required to address full UAS integration into the national airspace system (NAS). Before the end of the year, the agency is also expected to announce six testing sites where researchers can develop a body of data and operational experiences about the safe integration of UAS into the civil airspace. 
 
Blakey mentioned the surge in public attention about UAS in 2013, especially the recent announcement about Amazon Prime Air, which serves as an example of the potential commercial usage of these systems.  
 
"The advent of domestic UAS received a lot of public attention this year," said Blakey, "I can’t predict for you exactly when UAS will be used to deliver packages to your front door, but I can tell you this — with the support of groups like AIA, we will get these benefits, while also safeguarding property and privacy."

 

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