Aerospace sales could soar

  • Herald news services
  • Wednesday, December 13, 2006 9:00pm
  • Business

WASHINGTON – The Aerospace Industries Association expects U.S. aerospace sales will top $195 billion in 2007, up $11 billion from this year.

Civilian aircraft sales have propelled industry growth, the group said in its annual forecast Wednesday. But the trade group also predicts the commercial space sector and Pentagon sales will grow modestly next year.

Top 2007 lobbying priorities include a range of international efforts, as well as an ongoing push to improve ethics and secure, stable Pentagon funding for key programs, said John Douglass, AIA president.

The group wants the U.S. government to ease export restrictions and to relax Pentagon contracting regulations that require U.S.-made specialty metals for defense contractors, so that companies can buy and sell parts more easily around the globe.

Updated trade rules will help the U.S. economy as well as the industry, Douglass said. Already, U.S. aerospace companies, led by the Boeing Co., are net exporters of aircraft, spare parts and related services.

In 2006, the U.S. aerospace sector had a trade surplus of about $52 billion for the year, according to AIA’s numbers. This is nearly as large as the trade deficit posted by overall U.S. economy in any given month, which recently has been running about $60 billion.

Douglass acknowledged that aerospace industry profits have been relatively soft in recent years: $12.4 billion, or 6.1 percent of sales in 2006, and $12.6 billion, or 6.4 percent of sales in 2005. Still, he said, the industry is healthier than it was in 2001 and 2002, when profits dipped to about 4 percent of revenue.

In 2006, total aerospace sales are expected to come in at $184.4 billion, marking three consecutive years of record sales for the industry.

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