2007 U.S. Aerospace Sales Grew 2008 Expected to Continue Trend

According to a the recently released AIA Aerospace Research Center's Analysis, for the fourth year in a row, U.S. aerospace sales increased in almost every industry sector in 2007. AIA expects that 2008 will extend this trend. In 2007, total sales will reach nearly $200 billion, and next year will certainly punch through the $200 billion mark by approximately $11 billion. While sales in 2007 increased across the board for nearly all product and customer categories, most notable was the surge in the civil aircraft sector of 16%. Once again, the aerospace industry was a major contributor to the nation's trade balance, with exports jumping to $92.5 billion. In spite of a jump in imports of 18%, the net trade surplus for the sector should grow to more than $56 billion. Overall, AIA expects robust growth to continue through 2008. Aerospace industry sales are projected to grow nearly $12 billion to $211 billion next year, spurred by civil aircraft sales and engines and parts deliveries, which are likely to jump another 13%.

Orders and Backlog

Total orders will rise by $21.7 billion, or 9%, to $261 billion in 2007. With shipments totaling $184.9 billion, the order backlog will increase by $57 billion to $360 billion. The backlog is primarily driven by the sharp increase in orders for commercial jetliners. As of September 30, a total of 3,019 commercial transport aircraft remained in the unfilled order backlog. Foreign customers held orders for 2,214 of those airliners amounting to over three-quarters of the value of the backlog. This obviously reflects the fact that the major U.S. legacy carriers have still not begun placing significant orders to recapitalize their fleets since the post-9/11 downturn.

2008 Forecast

AIA forecasts that U.S. aerospace industry sales will grow 6%, or $12 billion, to a record $210.6 billion in 2008. The increase will be driven primarily by increased delivery of civil aircraft, engines, and related parts and components. Deliveries of civil transports will likely top 480 aircraft, for a value of $33.5 billion, and general aviation – particularly business jets – will add another $12.8 billion to sales. Looking beyond 2008, the current backlog of commercial aircraft orders gives us confidence that the civil aircraft sector will continue on an upward trajectory for at least an additional three or four years.