Conflicts in the Middle East and the need for homeland security have bolstered revenue.
New York, NY (PRWEB) August 01, 2014
Over the past five years, the Unmanned Aerial Vehicle (UAV) Manufacturing industry experienced strong growth and sharp declines. Industry players develop and manufacture remotely piloted and autonomously operated aircraft typically called UAVs or drones. From 2009 to 2010, the industry experienced a boom in demand as the Department of Defense (DoD) poured billions of dollars on the acquisition and development of drones for surveillance and strike missions. “However, with combat operations in the Middle East coming to an end, and the government attempting to reduce the nation's debt, federal funding for defense began to decline,” according to IBISWorld Industry Analyst Maksim Soshkin. As a result, funding for industry projects began to be cut and industry revenue declined. Revenue is expected to drop 13.8% in 2014 alone. Nonetheless, the earlier surge in DoD spending, combined with continued military funding for UAV development and procurement, has meant that industry revenue is still greater than 2009 levels. Therefore, in the five years to 2014, industry revenue is expected to increase an annualized 2.7% to $3.4 billion.
“Outside the defense market, industry players have increased the focus on the development of UAVs for domestic use,” says Soshkin. Potential domestic uses for drones include border enforcement, humanitarian relief, search and rescue, scientific research, meteorology, firefighting, precision agriculture, infrastructure surveying, police surveillance, freight delivery, and communication signals relaying. However, domestic operations of drones is highly restricted by the Federal Aviation Administration (FAA). As a result, in 2012, Congress ordered the FAA to establish rules by which UAVs can be integrated into domestic airspace by 2015.
In the five years to 2019, industry revenue is forecast to climb, almost recovering from recent defense funding cuts. While the defense spending situation is only projected to improve towards the end of the next five years, the DoD is still anticipated to pour billions into industry projects. In particular, the government will seek to develop and procure next generation UAVs that will be able to operate in “contested” airspace. With the FAA anticipated to establish regulations for the domestic use of drones, demand from the civil market is projected to boom. Consequently, the number of industry enterprises is set to continue rising.
For more information, visit IBISWorld’s Unmanned Aerial Vehicle (UAV) Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
Industry firms manufacture and design unmanned aerial vehicles (UAVs) and related control systems for civilian and military applications. UAVs can be either autonomous or remote controlled, and are used in situations where the use of a human pilot is undesirable or dangerous.
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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