Is the Aircraft and Aerospace Market the Healthiest Part of the Manufacturing Economy?
The aircraft and aerospace market is the “healthiest part of the manufacturing economy,” according to Richard Aboulafia, vice president of analysis for Teal Group Corporation.
However, he noted that changes happen quickly in the industry and that this growth could be disrupted by a number of factors.
While the aircraft and aerospace industry has historically relied on established producers, companies are now looking for alternate supply sources to help them meet the technological demands presented by new engines, Aboulafia noted. He suggested that manufacturers look at companies they may already be serving in other market segments to see if they have needs in their aerospace divisions. Looking at opportunities near new plants also makes sense. Aboulafia highlighted several new facilities in the Southern United States that are likely to generate the growth of nearby suppliers to meet tooling requirements.
Aboulafia explained that change happens slowly in the aerospace industry. For instance, he argued that the revolution in new materials, such as composites, has been oversold. There is, however, interest in new alloys or alternative materials that are both strong and lightweight and have the potential to save companies money.
As for the future of the industry, Aboulafia said that manufacturers should watch four key areas to determine if growth will continue or slow. These include:
- interest rates, which need to remain low;
- fuel prices, which Aboulafia would like to see rise a bit;
- order activity, or the book to bill ratio that companies maintain; and
- airline passenger traffic, which needs to remain high.
For more information about exciting developments in the aircraft and aerospace market, as well as opportunities in other market segments, plan to attend the Global Forecasting and Marketing Conference on October 19-21, 2016, in Miami, Florida.
Watch more IMTSTV interviews with industry experts and get a glimpse into what’s coming to IMTS 2016.