Challenges Are A Comin'
The news is good, but with a caveat.
According to a recent report, "US Aerospace Industry Analysis,"
the US continues to lead the global aerospace industry, growing
last year by more than 8 percent to exceed $183.5 billion versus
$169.8 billion in 2005.
Estimates for 2007 show sales will rise by around 5.8 percent to
surpass $194.8 billion as purchases by the Defense Department and
space sector will record a slight increase, while commercial
aircrafts, engines, and components deliveries post rapid
growth.
According to the RNCOS report, since the onset of 20th century,
the US has been the largest manufacturer and market for aviation
and aerospace in the world.
Great news! But mind your back, aerospace industry, as there are
three significant challenges to be faced, according to the
report.
- Rising competition at the international level
Although the US has been successful in retaining both its
technology and market leadership in the worldwide aerospace
industry, its dominant position has been shaken. Several foreign
governments want to emulate its success, developing competitive
aerospace sectors and giving full support with subsidies for
product innovation and production. Additionally, with technology
transfers and setoffs, purchasing US aerospace products is reliant
on their own companys' supplying some of the parts.
- Continuing reductions in defense budgets
Historically, half of aerospace industry revenues were generated
from the military sector. Reductions in defense budgets, both in US
and other nations of the developed world, have decreased the need
for missiles, military aircrafts, and other related machinery from
US suppliers.
- A poor worldwide economy
The US aerospace
industry, a leader at both the national and global level, is an
integral part of the US economy, reports RNCOS. More importantly,
it is the primary exporter of the country and produces the largest
trade glut of any US industry. The industry, with over 25 percent
share in the country's total R&D expenditures, said RNCOS, is a
technology pioneer in the nation.
Incorporated in 2002, RNCOS is an industry research firm
boasting a team of industry experts who analyze data collected from
credible sources. The company provides industry insights and
analysis that assist corporations in making timely and accurate
business decisions in today's globally-competitive environment.