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.

FMI: www.rncos.com/Report/IM503.htm