Rising demand for military aircraft and missile systems drove industry growth.
Los Angeles, CA (PRWEB) November 10, 2012
The Global Military Aircraft and Aerospace Manufacturing industry has been growing over the past five years due to increased demand for military aircraft and missile systems, especially from the North America and Europe regions. Growth in military aerospace equipment was backed by the Iraq War, the war on terrorism and homeland security. Because of heavy military activity and increased defense funding across various regions, IBISWorld anticipates the industry to grow at an annualized rate of 2.2% to roughly $165.3 billion over the five years to 2012, with an expected increase of 3.6% during 2012, according to IBISWorld industry analyst Antonio Danova.
IBISWorld estimates that there are 1,735 establishments and 1,370 enterprises in the industry in 2012. The number of establishments is expected to increase at an annualized rate of 0.2% per year over the five years to 2012 due to the emergence of new players in the Asia-Pacific region, Danova says. The increase in establishment numbers in this region has outpaced the consolidation of players in Europe and North America. The Global Military Aircraft & Aerospace Manufacturing industry has also experienced an increase in collaborations between enterprises to reduce risks and costs, which led to a larger rise in establishment numbers than enterprises.
Over the past five years, profitability within the industry has been hampered by rising prices in key inputs. For example, IBISWorld estimates that steel, the main input in the manufacture of industry products, has been growing at an annualized rate of 2.8% over the past five years. As a result, the average industry profit has fallen. Nonetheless, some profitability has been salvaged thanks to technological advancements that have increased efficiency in the manufacturing process, as well as training grants and tax breaks from government clients.
The industry will continue to grow over the next five years, but at a moderate pace as modest spending in defense budgets occurs across the globe, but particularly in Western and developed nations. However, strong GDP growth from newly industrialized nations such as China and India will buoy demand for military equipment and air superiority. Additionally, new technology in aerospace equipment and military parts will boost demand as clients look to update their existing products. As a result, IBISWorld estimates that industry revenue will grow over the five years to 2017. The Global Military Aircraft and Aerospace Manufacturing industry carries a moderate level of market share concentration, with the top four firms accounting for almost half of industry revenue in 2012. For more information, visit IBISWorld’s Global Military Aircraft & Aerospace Manufacturing industry report page.
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IBISWorld industry Report Key Topics
Firms in this industry engage in the manufacture of complete military aircraft, missiles or space vehicles, along with associated parts. Industry firms also develop prototypes of aerospace products; convert aircraft (i.e., major modifications to systems); and complete aircraft or propulsion systems overhaul and rebuilding (i.e. periodic restoration of aircraft to original design specifications).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique industry information and analysis. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.