Final approach: The real deal

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According to Jeegar Kakkad, chief economist & director of policy, ADS, new investment and vision is needed to further boost productivity and ensure the UK remains one of the best places in the world to innovate, do business and create jobs.

 

The UK’s aerospace sector is a strategically important to the UK and worth £35 billion a year, providing 120,000 important high value jobs across the country. With the UK negotiating the terms on which it will leave the EU, we must ensure our industry’s globally competitive sectors are best prepared for the challenges they will face in the years ahead. To this end, in December the Government launched the Aerospace Sector Deal which is a strong commitment to the aerospace sector and enabling its competitiveness and success.

Through this sector deal, the Future Flight challenge will help the UK become a world-leader in delivering cleaner, quieter and more innovative aircraft, with £125 million in Government funding, more than matched by industry. By harnessing technological advances and constantly challenging what’s possible, we can move into the future and advance the sector to the benefit of the global aerospace industry and international aviation customers.

The sector deal aims to ensure we continue to enjoy the growth generated by a thriving global sector. As we look to the future, it’s likely we’ll see a continuing focus on single-aisle aircraft as aircraft passengers look to buy more short- to mid-haul flights flying direct to their destinations.

However, with the size of the order backlog close to static in the course of 2018, the industry is watching closely to see whether demand remains strong in the years ahead. In the UK, uncertainty around Brexit is causing unease in the market, making it harder for manufacturers to plan for the future and invest in new capacity, while some small UK airlines have hit problems as Brexit approaches.

The Office of National Statistics’ Index of Production showed a worrying slowdown for the UK manufacturing sector in 2018. The UK aerospace sector recorded an annual fall of 3.9% overall, only the second year of declining output in the sector since the 2008 recession. We reported at the end of January that the major global aerospace manufacturers achieved a new aircraft delivery record of 1,618 in 2018, an increase of 8% on the previous year; but the Index of Production figures for the full year point to a declining UK share of this important high-value manufacturing market, despite production worldwide continuing to rise.

It remains concerning that despite a thriving global aerospace market, the UK’s role in it has been threatened by Brexit uncertainty. Businesses and trade associations have made clear the impact that this uncertainty is having on our ability to compete in international markets. Airbus has said they’re spending millions of Euros on No Deal Brexit planning, resources that could have been better spent on investment in R&D and finding innovative solutions for the future of flight.

ADS, is determined to work with the UK Government and devolved administrations, to ensure that sectors receive the support they need to continue innovating and succeeding in international markets, and despite the challenges we face, UK industry offers world-leading expertise and experience.

This year we are looking forward to the Paris Airshow, an important opportunity for the UK aerospace, defence and space sectors to show what they have to offer. While in September we will be hosting a first Global Urban Air Summit in Farnborough, putting a spotlight on this new and exciting potential growth area for aerospace.

Our more than 1,000-member companies have a great deal to offer customers in the UK and overseas. With the right long-term industrial strategy partnership between Government and industry across our sectors and a Brexit deal that delivers a smooth transition and a close continuing trading relationship with the European Union, we can continue to thrive.

www.adsgroup.org.uk

Company

ADS Group

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