Sales by the U.S. aerospace industry fell $2 billion in 2013 due to federal budget cuts but are expected to rebound next year, according to an industry group.
In its annual year-end review and forecast, released Dec. 18, the Aerospace Industries Association (AIA) projected overall aerospace industry sales for 2013 at $220 billion, down from $222 billion in 2012. A $5 billion increase in civil aircraft was more than offset by a $4 billion drop in military aircraft, a $2 billion decline in civil and defense space and a $1 billion contraction in missiles.
Aerospace employment also suffered in 2013. The industry shed about 13,000 jobs, leaving a workforce of about 618,000, the lowest level in eight years.
“Some defense firms responded to [the across-the-board federal budget cuts known as] the sequester by divesting units while others offered buyouts to employees,” AIA said.
The association expects 2014 to be a better year for aerospace. It projects growth in civil aircraft and the space sector to boost overall industry sales by 5.5 percent to $232 billion next year.
A key sign of future strength in civil aircraft is a backlog of 4,787 transport aircraft worth $344 billion, “equivalent to seven and one-half years at current production rates,” AIA said. Two-thirds of those orders are from foreign carriers.
Other bright spots highlighted by AIA include unmanned systems and maintenance. Annual spending on civil and military unmanned aircraft is expected to double over the next decade, from $6.6 billion to $11.4 billion. And the maintenance, repair and overhaul sector continues to see double-digit growth.
A newly approved congressional agreement to partially undo the sequester should also help the aerospace industry, the association said.
But until the sequester is completely reversed, it will remain “a real and immediate threat” to the U.S. aerospace industrial base and its workforce, especially among small and medium-sized companies, the group warned. In a statement on the budget deal Dec. 19, AIA said that while the agreement “gives some relief over the next two years, we remain deeply concerned about the remaining cuts and the consequences of sequestration after 2015 if not addressed.”
