UK aerospace in 2005 - a message from the SBAC President

UK aerospace in 2005 - a message from the SBAC President

SBAC's UK Aerospace Industry Survey is the most comprehensive analysis of companies supplying the civil air transport, aerospace defence and space sectors. This year's results show that the aerospace industry is enjoying a sustained period of growth and based companies are successfully winning business in an increasingly competitive global marketplace.

The survey shows that 2005 was a phenomenal year for the aerospace industry with substantial increases in turnover, employment, R&D investment and new orders. The sector has demonstrated a remarkable resilience and determination to remain the largest aerospace industry outside the and has world leading companies across a range of products and technologies.

In 2005 turnover increased by 25 per cent to £22.67 billion, taking sector sales back to pre 9/11 levels. Civil aerospace revenue increased for the second year in a row, rising by 18.3 per cent to £10.5 billion and defence sales increased to £12.2 billion, up more than 30 per cent on 2004.

New orders increased by 33 per cent to a record high of £30.8 billion, 135 per cent of 2005 turnover, with orders evenly balanced between civil and defence programmes. The strong order book reflects increasing demand in emerging economies like and and continued investment in defence capability.

he SBAC survey shows aerospace directly employs 124,237, an increase of nearly 10,000 on the previous year, supporting a total of 276,000 jobs across the economy. The aerospace industry provides high value employment with average salaries of £33,000, some £8,000 more than manufacturing as a whole. The industry also has a strong commitment to developing young people with the survey showing the sector employing 2,700 apprentices.

The increase in employment reflects a significant rise in output and has been accompanied by an even greater increase in productivity. Productivity per employee increased by 15 per cent, significantly exceeding the industry's long term trend, and demonstrating the significant investment that is being made by companies in process improvement.

There was a welcome 31 per cent increase in R&D spending in 2005, up to £2.7 billion. Investment in the development of new technology is essential for long-term competitiveness and the progress of the National Aerospace Technology Strategy has the highest priority across the sector.

The increasing globalisation of the aerospace industry is demonstrated by the continued growth in employment and turnover of companies overseas assets. In 2005 these generated £6.4 billion of sales and close to 43,000 jobs. The continues to attract the substantial proportion of investment overseas, with employment increasing slightly on last year.

The continued growth in demand for air travel worldwide presents major environmental challenges. The launch of Sustainable Aviation, the world's first sustainability strategy for the aviation sector, signalled industry's commitment to delivering environmental improvement, alongside the economic and social benefits of air travel.

The aerospace industry is a dynamic and globally successful sector, the intense efforts by industry and Government to address long-term competitiveness issues through the Aerospace Innovation and Growth Team process is beginning to pay dividends. There remains much still to do and during 2006 SBAC continues to focus on improving skills, raising productivity and increasing investment in R&D.

Chris Geoghegan

President SBAC & Chief Operating Officer BAE Systems