THE US AEROSPACE industry is on course for an upturn in 1996, after four consecutive years of falling sales, according to year-end predictions from the US Aerospace Industries Association (AIA).

AIA president Don Fuqua forecasts that the industry will re-emerge leaner and fitter from its consolidation, ready for a recovery.

The predicted rise in sales will be modest, pegged at little more than 3%, taking the industry total to $110 billion. The rise will primarily be driven by an increase in exports of civil aircraft and engines, with increased shipments of jet airliners to foreign airlines due to add $5.3 billion alone.

Sales of military aircraft and missiles are forecast to continue their decline, however.

Even with the projected rise, the industry will still be around 20% down from its peak of 1991. In real terms, the sales volume will achieve no more than enable recovery to the pre-boom level of the early 1980s.

Employment is also expected to continue its long-term decline, although at a lower rate than over the past six years. The workforce ended 1995 at around 778,000, after another 49,000 jobs had been shed. Another 15,000 workers are due to go in 1996, as a slight rise in civil employment fails to compensate for the continuing decline in defence sales.

The AIA's preliminary figures for 1995 show that sales and jobs edged down in all sectors, with the exception of space. The largest single factor behind the fall was a $2 billion dip in sales to the Pentagon. Spending by other US Government agencies, including NASA, also dropped by nearly $900 million.

Civil-aircraft sales also declined in 1995 because of a fall in the number of large jet-airliner deliveries, down from 309 to 256, but the figure is due to rise to 295 as deliveries pick up in 1996. General-aviation aircraft shipments for the year totaled 1,020, up from the 1994 total of 928. They are also due to grow strongly again in 1996.

The effect of restructuring has continued to be reflected in corporate profits, with US aerospace corporations showing a $4.5 billion net return in 1995. Although down on the record $5.6 billion of 1994, the result leaves aerospace with a 3.7% net return on sales, putting it comfortably ahead of the US manufacturing sector as a whole.


Source: Flight International