Aerospace Industry Experts Caution over 2012 Outlook

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Aerospace Industry Experts Caution over 2012 Outlook

06 February 2012

Marion Blakey, President & CEO of AIA noted that “based on preliminary data, 2011 appears to have been a very good year. Despite significant headwinds and under the cloud of recession, the US aerospace industry performed well this year, and remained one of the most significant contributors to the national economy. Annual sales are expected to top $218 billion, marking the eighth consecutive year of growth. Unfortunately, we’re predicting that 2012 will be a much different year. We expect aerospace sales to decrease by about half a billion dollars.”

She continued to advise that increasing civil aircraft sales due in part to higher commercial air traffic and high fuel prices, combined with rapid growth in air travel in Asia and the Middle East, should  go some way to making up for reduced defense spending in 2012, according to the Aerospace Industries Association (AIA).

Standard & Poor’s agreed that the aerospace and defense industries prospects will diverge in 2012, with weak economic conditions not likely to impact on the commercial sector. Meanwhile governmental deficits and spending reduction plans are likely to cause less defense demand although “commercial aerospace is a global business, so a weak U.S. economy should not be a major hindrance if other regions are growing,” said S&P credit analyst Christopher DeNicolo.

Joe Pinto, Vice President & Chief Operating Officer of the Performance Review Institute (PRI) cautions that “if revenues falls, there will be a temptation to cut costs and quality departments will find it difficult maintaining what they need to do. Being the gatekeeper of the end product is a difficult task, but PRI will be diligent in helping industry maintain quality through continual improvement of Nadcap, despite intense pressures on the industry to cut costs.”