Aerospace Products & Parts Manufacturing Industry Profile

The US aerospace products and parts manufacturing industry includes about 1,300 companies with combined annual revenue of about $175 billion. Major companies include Boeing, Northrop Grumman, Lockheed Martin, Raytheon, and General Dynamics. The US industry is highly concentrated: the 20 largest companies account for about 90 percent of industry revenue. Many companies work primarily as subcontractors to the five largest manufacturers.

The global aerospace manufacturing industry generates more than $700 billion in annual revenue. Major international companies include the Netherlands-based EADS (and its French subsidiary Airbus), BAE Systems (UK), Finmeccanica (Italy), and Bombardier (Canada).

COMPETITIVE LANDSCAPE

Demand is driven by the US military budget and the overall economic climate, which affects airline traffic and demand for new commercial aircraft. The profitability of individual companies depends on technical expertise and the ability to accurately price long-term contracts. Large companies enjoy economies of scale in design, manufacturing, and purchasing. Small companies can compete effectively by concentrating on selected components and parts manufacturing for particular prime contractors. Increasingly, small companies are developing system integration capabilities as large firms outsource more aspects of contracts. The industry is capital-intensive: average annual revenue per employee is about $400,000.

The US aerospace industry exports a significant portion of its output. The countries receiving the largest amount of US exports include France, the UK, China, Germany, and Canada. The US aerospace manufacturing industry faces increasing competition in global markets from state-supported firms ...