Forecasts for the aerospace industry -- 2013 and beyond

The turn of the year has seen a slew of new forecasts for aerospace markets in 2013 and beyond. Here are three of them.

Aerospace Industries Association

The Aerospace Industries Association (AIA) forecasts that US aerospace sales will continue to rise in 2013, by 2.6%, marking a tenth successive year of growth. A 4.6% decline in military aircraft and missile sales will be offset by a rapid 11.4% growth in civil aircraft sales – and an astonishing 40.0% growth in the three years since 2010 and a more-than-doubling of annual sales since the downturn of the early-2000s.

“The overall projections for 2013 are generally positive – excluding the domestic military market – and illustrate the health of the industry. However, much depends on strong and sustained economic recoveries in the U.S. and Europe.

“Combined with rapid growth in air travel in Asia and the Middle East, volatile fuel prices continue to spur world airlines to replace older, less fuel-efficient aircraft, adding momentum to a growing demand for new aircraft. Moreover, the global air traffic market is expected to increase annually at a rate of five percent over the next 20 years, considerably higher than the global GDP growth rate.

“Current order books for large civil aircraft manufacturers contain a six- to seven-year backlog. As Boeing continues to increase production rates of both the 787 and 737, shipments of civil aircraft will increase. Civil aircraft, engines and parts manufacturers will find expanding markets in both the U.S. and abroad. It is expected that the business jet market, which has been battered both by difficult market conditions and political headwinds, will improve modestly in 2013. The aftermarket parts and service sector for business jets and large commercial airplanes will continue a solid recovery, growing at a CAGR of four percent, driven by increased flight hours for both categories and expected services predominately for engines and components.

“The defense sector appears to be the most problematic in 2013 and beyond, particularly with respect to the domestic market.”

To download the report, click here.

Aviation Week

Aviation Week concurs that 2013 will see commercial aerospace production rising and defence budgets and sales falling. But it warns that economic uncertainties and regional instabilities could affect both, with the key factor being “China and its growing financial, industrial, political and military influence on aerospace and defense globally.”

In “an industry on divergent trajectories,” Aviation Week expects 2013 to

“see order-taking moderate, but production rates increase to record levels.”

While

“for the defense and security sector, 2013 will see lower spending globally and a focus on squeezing more out of existing platforms.”

To read more, click here.

Agency Partners

Quoted in the Financial Times, Nick Cunningham, analyst at Agency Partners, predicts that Airbus and Boeing will reduce aircraft production after 2015.

“Aircraft orders have either peaked or are about to peak for Airbus and Boeing, and the historical trend tells us that the peak in aircraft deliveries will follow within two or three years.” Boeing to overtake Airbus jet deliveries, Andrew Parker, www.ft.com 1 Jan 2013.