Topline output continues at near record levels. Key segments look set for growth through the next three years, at least. There are areas of concern, and not all manufacturers will benefit equally, but overall the industry is in excellent shape.
World industry output in 2017 came to just over $180 billion. Deliveries in 2014-2016 have all been at about this level in constant 2018 dollars (2015 was the all-time record, at $183.5 billion).
Production of the AN/ALQ-135 has ended for US aircraft, but updated systems were in production for South Korea’s F-15Ks through about 2013 (Singapore turned to Israel for its F-15SG’s EW suite). The F-15 has been among the most successful US fighter programs, and the sale to South Korea was hugely important for its future. The F-15K/SG rejuvenated the aircraft, with new systems, weapons, and sensors. Also, both countries have al-ready bought more planes, as a 40 or 12 aircraft force is not a sustainable minimum for the long run.
The following is an excerpt from a recently released Teal Group study analyzing regional aerospace industry competitiveness across the U.S. For the full report please click here.
AEROSPACE COMPETITIVE ECONOMICS STUDY
Based on the research conducted for this study, the states of Washington, Ohio, North Carolina, Kansas and Colorado offer the most competitive business environments for the manufacture of aerospace equipment. These states ranked high in a number of the evaluation categories and corresponding metrics.
Washington scored extremely well across all categories and was a top ten finisher in all but one. It ranked first in two categories: Economy and Industry, while finishing second in Labor & Education and Costs. It was ranked number five in Risk to Operations, Research & Innovation and Taxes & Incentives. Infrastructure was the only category where Washington fell outside the top ten.
Ohio had the second highest overall rank, with significant separation between it and the state of Washington. Demonstrating the substantial gap between first and second, Ohio finished in the top ten in only two categories, Labor & Education and Industry. It did finish in the second ten in a number of categories, thereby reinforcing its overall strong showing. These categories included: Economy, Risk to Operations, Infrastructure, Costs, and Taxes & Incentives.
The development of a new generation heavy ICBM to replace the old 15A18M (SS-18 Satan) began with a design study codenamed "NIR Argumentatsiya" at NPO Mashinostroyenie in 2007 that studied the possibility of designing a weapon on the basis of existing submarine-launched ballistic missile. The study proposed the use of the liquid fuel engines from the R-29RMU2 (SS-N-23 Skiff) and the warhead package of the failed R-39UTTKh Bark (SSNX-28).
Although the AN/APY-8 Lynx was the best of the first generation of production-ready small SARs (Northrop Grumman’s TESAR was the only other major system, and that was removed from service on Predators without a replacement), Teal Group has long believed there has been a chance that Lynx production could have been cancelled or greatly reduced for the USAF Reaper procurement. But the first published Lynx/Reaper contract in a long time – the Air Force’s contract for 72 Block 20A Lynx upgrades in May 2015 – gave us new confidence that Lynx would continue to serve on Reaper. In February 2016, USAF FY17 budget documents indicated there were about 250 Lynx radars procured or planned for Reaper – basically one per Reaper.
Torpedo countermeasures have been a vital but little-heralded component of a surface combatant’s defensive systems, which will only become more important as the US Navy “pivots” to Asia, increasingly exposed to Chinese, North Korean, and other modern, quiet diesel submarines. The Navy will continue to install Cold War-origin AN/SLQ-25A/C NIXIE systems aboard all its new surface combatants until follow-on systems become available. Original US Navy requirements called for a total of 240 SLQ-25A systems, and perhaps 300 systems for all navies had been produced by 2005. Funding began increasing in the May 2009, FY10 budget, and continued to grow.
Please note that this article is from Teal Group’s 2017 World Military UAS Forecast. The 2018 UAS market forecasts will be released as follows: World Civil UAS Profile & Market Forecast -- mid-July 2018 World Military UAS Market Profile & Forecast -- mid-September 2018
In termsof worldwide military budgets, the unmanned aircraft systems (UAS) segment promises to be one of the most dynamic growth sectors, continuing the past decade’s rapid spending growth. The unclassified sector will continue to increase over the next decade, by about 36%, from current annual spending on RDT&E and procurement of about $9.6 billion in FY18 to about $13 billion in FY27. If operations and maintenance expenditures were to be added, these totals would be even greater.
Russia is still attempting to recover from the tumult of the 1991 dissolution of the Soviet Union. In contrast to the former Warsaw Pact countries such as Poland and the Czech Republic, Russia suffered from a far more serious and prolonged economic crisis, which in turn undermined attempts at military and industrial reform. This abated in recent years both due to an upturn in government revenues from oil exports as well as a rationalization of the tax system which has stabilized government revenues. Indeed, there has been enough of an increase in defense spending that the government announced some small but significant procurement efforts starting in the 2005 budget and continuing through the 2015 budget.