Strong Year from GBP23Bn UK Aerospace Sector Despite Tough Global Economy
- Sales up by 2.1% to GBP23.1 billion, civil sales rose by 1.3% & defence sales up 2.8%.
- Employment down by 4% to 96,510, productivity per employee up by 6%.
- Exports remain majority of sector turnover at 70% of total.
- 11% fall in orders (to GBP29.1 billion, still above 1997-2009 average of GBP27.5 billion) due entirely to 29% fall in defence orders. Civil orders up 3% from GBP18.5 billion to GBP19 billion.
The overall picture presented by the survey is of a strong performance in 2010 despite a tough year but defence cuts are beginning to bite, reflected in a fall in defence orders. Current and future years will see further challenges for the sector, although with accelerating growth in civil aerospace the order book in this area is holding up.
The Global Commercial Aircraft Market 2013-2023
Graham Chisnall, Managing Director of Aerospace and Operations at A|D|S, said:
"Aerospace in the UK has delivered a strong performance in a very tough global climate. Sales growth in 2010 shows that the slow dispersal of a global recession and other issues such as the Icelandic volcanic eruption and extreme weather conditions were not enough to hold the industry back. Further challenges lie ahead, especially on the defence side, but the accelerating recovery in civil aerospace and the long-term record of UK success in this world-leading sector give increasing cause for optimism.
"The Government is keen to see UK industry deliver strong exports, high-tech and long-term jobs as well as strong economic benefits. Aerospace is delivering on these national needs and we look forward to working with the Government to continue this record of success. In aerospace the competition is as much between countries as it is between companies. A strong industry-Government partnership together with sustained public and private investment will be crucial to maintaining the long-term future of the sector. We have made an encouraging start with high-level meetings that involve industry seniors and are chaired by Vince Cable and Mark Prisk."
A summary of the surveys findings for calendar year 2010 are:
* Up by 2.1 per cent to GBP23.1 billion.
* Defence was up by 2.8 per cent and civil increased by 1.3 per cent.
* Defence makes up 52 per cent of the sector and civil the other 48 per cent.
* The UK sector is much less dependent on sales to the domestic government than the US or EU average. For example, the UK sector's sales to the UK Government makes up 19 per cent of sales compared to 57 per cent in the US or 27 per cent on average in the EU.
* Down by 4 per cent to 96,510 but offset by a rise in productivity per employee by 6 per cent.
* Continued recruitment will be required due to ongoing growth in the sector as well as a large proportion of the workforce due to retire over the coming years. The fact that the number of students in relevant sector subjects has risen by 7 per cent is positive in this climate.
* The average weekly wage grew by 3 per cent and 3 per cent of the workforce (2,600 people) are apprentices.
* Exports make up 70 per cent of turnover.
* Defence exports were up by 4.5 per cent and civil exports rose by 0.5 per cent.
* Sales to the US and the rest of the world (excluding UK, US & EU) were up while sales to the EU were down.
* Civil orders rose by 3 per cent from GBP18.5 billion to GBP19 billion.
* Overall orders fell by 11 per cent due entirely to a 29 per cent drop in defence orders. This is still a good performance at GBP29.1 billion for 2010 when compared with the 1997 - 2009 average of GBP27.5 billion.
* Domestic orders rose by 6 per cent to GBP7.6 billion. They were up 0.6 per cent in defence and by 4.6% in the civil sector.
* The EU makes up 32 per cent of the market so the fall in orders from the EU had an impact on the overall figure.
Research, development and technology:
* R&D and R&T spending remained unchanged overall at what are historically low figures.
* In the civil sector the figures grew by 7 per cent while in defence they fell by 5 per cent.
* R&D was down in aircraft and systems but up in engines and equipment.
* Industry contributed 48 per cent of overall R&D investment and Government contributed 24 per cent.
Source : ADS Group UK