Uncertainty created by the current U.S budget process, says AIA

Posted by- Neelam Mathews

Dec 14, 2011

Failure of the deficit reduction supercommittee and the specter of sequestration cuts cast a shadow on a relatively strong year for the aerospace industry, says Aerospace Industries Association.

“The fact that our industry is a leading job-creator, a technological innovator and a critical part of our nation’s security is too important to be taken for granted,” said AIA President and CEO Marion C. Blakey. “If this industry stops being Second to None, the future of our country is in question.”

In her remarks to more than 300 members of the news media, government and industry at the association’s 47th annual Year-end Review and Forecast Luncheon, Blakey cited a preliminary total aerospace sales figure of $218 billion, making 2011 the eighth consecutive year of growth.

“Annual sales are going to be up across the board in 2011,” Blakey said.  “But in 2012 we expect things to begin to change.”

In 2011, the U.S. aerospace industry contributed $87 billion in export sales to the U.S. economy, up 12 percent, after falling during the two previous years.  The industry’s positive trade balance of $57.4 billion is the largest trade surplus of any manufacturing industry. 

This year was a challenging one for the space industry.  The space shuttle was retired, and we experienced cuts to NOAA weather satellites and space security programs.  Nonetheless, sales increased from $45.3 billion in 2010 to $46.4 billion in 2011.

On the jobs front, aerospace employment will see a slight increase in 2011.  However, sequestration cuts could cost the industry dearly in the years ahead, with projected job losses in the hundreds of thousands and more than a million jobs at stake in the broader economy.

“Under sequestration, our industry faces exposure all around,” Blakey said. “Not only are the defense cuts unsustainable, but domestic discretionary programs could be cut by about 7 percent as well, including deeper cuts to NASA, NOAA and critical FAA programs like NextGen.”

The aerospace industry is among those dealing with the downward pressures of a challenging economy, and the uncertainty created by the current budget process in Washington. Congressional efforts will be slow to reveal a clear path forward on resolving the debt, and will be freighted with a whole new level of political intensity.

“We need a resolution,” Blakey said.  “Our only option for 2012 is to keep fighting.  That means new rallies, more outreach and ongoing efforts to educate policymakers and stakeholders across the country about the disastrous consequences of gutting the U.S. defense and aerospace industry.”