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Aerospace sector 'under threat' from global demands


UK needs more home-grown, mid-sized firms to secure its global pre-eminence, finds report

More than 62% of aerospace engineers believe that their companies face productivity issues that threaten the UK’s position as a global aerospace superpower, resulting from an increasingly demanding and global aerospace market, a report has found.

The Aerospace Report, from accountants and business advisors BDO in association with the Institution of Mechanical Engineers, has found that although many engineers regard UK aerospace manufacturers as ‘best in class’ in terms of productivity in the past, they feel that production rate ramp-up on some new aircraft platforms has changed that.

The report found that 63% of engineers surveyed believe that the UK needs more home-grown, mid-sized companies to secure the UK’s global pre-eminence. Only 13% of respondents believed that UK SMEs are sufficiently capable of coping with the growing demands of global prime contractors such as Airbus and Rolls-Royce.

The need to fulfil the new, higher production rates required by these prime contractors are highlighted as the main concern of aerospace engineers, alongside the need to invest in research and development to remain competitive. The skills shortage was also highlighted in the report, with 53% of companies experiencing difficulty with recruiting people trained in the disciplines they need.

The shifting pattern of the growth in global air travel is also a challenge to be addressed by UK firms, according to the Aerospace Report. Respondents expect Asia to represent 55% of the growth in the global industry within the next two years. As a result, about two thirds of the companies surveyed are in the process of creating an overseas facility and, of these, 34% are building a base in China.

Tom Lawton, head of manufacturing at BDO, said: “The importance of mid-sized manufacturers to the future of the UK’s aerospace industry should not be underestimated. Aggressive ramp up rates are putting suppliers under enormous pressure and companies in the supply chain will need scale and resources to absorb this pressure over the longer term.

“To remain relevant and successful companies must continue to invest for growth, in innovation to keep pace with developing platforms and in expansion overseas to address the desire to shorten supply chains.”

 Dr Colin Brown, director of engineering at the IMechE, added: “In terms of SMEs working in the aerospace sector, government needs support schemes that are focused and co-ordinated. Currently there are too many disparate initiatives co-ordinated by different departments. As last month’s Cole Commission report suggested, we need a one-stop-shop which co-ordinates and simplifies all the export support for SMEs. We also need to encourage more people to pursue engineering careers, whether that is through apprenticeships or university degrees, to keep key industries growing.”

Meanwhile, aircraft delivery data has revealed a record-breaking six months for the aerospace industry with rates up by 6% on the same time last year, according to new figures from trade body ADS Group.

During the first half of 2015, 685 new aircraft – almost four a day – rolled off the global production line, equating to about £11 billion to the national economy, a rise of £2 billion compared with last year.

The UK reported a 6% growth in exports since the start of the year.

The current backlog for aircraft stands at 12,868 equating to nine years work-in-hand. Record levels of demand for single-aisle aircraft is driving the backlog, with 10,183 currently on order.


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