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uk aerospace industry survey 2006

representing companies supplying civil air transport, aerospace defence & space
sponsored by

SBAC salamanca square 9 albert embankment london se1 7sp tel: +44 (0)20 7091 4500 fax: +44 (0)20 7091 4545 e-mail: post@sbac.co.uk

www.sbac.co.uk

contents

about SBAC data and information UK aerospace in 2005 a message from the SBAC President sustainable aviation revenue orders financial research and development employment SMEs international trade global trends

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3 5 6 16 18 20 26 32 38 40

Photographs reproduced with the kind permission of: Airbus SAS AgustaWestland BAE Systems EADS Eurofighter GmbH Gardner Aerospace Rolls-Royce plc

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about SBAC
SBAC is the national trade association representing suppliers to the civil air transport, aerospace defence and space markets operating in the UK economy. Together with its regional partners, it represents over 2,600 companies, assisting them to develop new business globally, facilitates innovation and competitiveness and provides regulatory services in technical standards and accreditation. SBAC members interests encompass aerospace manufacturing, maintenance and through life service, professional advice, academic research, training and education, the British Airports Group and UK Industrial Space Committee.

UK aerospace in 2005
data and information
The information provided in this booklet is primarily the result of the UK aerospace industry (UKAI) survey of 2005 undertaken by SBAC in 2006. In 2006 SBAC simplified the survey significantly following consultations with respondents. However SBAC does not believe that this has changed the overall patterns significantly. Data has been collected not only from SBAC member companies but also other aerospace companies (eg consortia, joint ventures, nonmembers and airline maintenance companies) both in the UK and the rest of the world. The results of the survey are used by a wide variety of stakeholders in the aerospace industry, including government ministers and departments (including Department of Trade and Industry, Ministry of Defence, Department of Transport, Defence Export Services Organisation and UK Trade and Investment), SBAC member companies and respondents to the survey. Additional analyses and background reports on the UK aerospace industry are available separately from the SBAC website www.sbac.co.uk

a message from the SBAC President


SBACs UK aerospace industry survey is the most comprehensive analysis of companies supplying the civil air transport, aerospace defence and space sectors. This years results show that the aerospace industry is enjoying a sustained period of growth and UK based companies are successfully winning business in an increasingly competitive global marketplace. The survey shows that 2005 was a phenomenal year for the UK aerospace industry with substantial increases in turnover, employment, R&D investment and new orders. The sector has demonstrated a remarkable resilience and determination to remain the largest aerospace industry outside the USA and has world leading companies across a range of products and technologies. In 2005 turnover increased by 25 per cent to 22.67 billion, taking sector sales back to pre 9/11 levels. Civil aerospace revenue increased for the second year in a row, rising by 18.3 per cent to 10.5 billion and defence sales increased to 12.2 billion, up more than 30 per cent on 2004. New orders increased by 33 per cent to a record high of 30.8 billion, 135 per cent of 2005 turnover, with orders evenly balanced between civil and defence programmes. The strong order book reflects increasing demand in emerging economies like China and India and continued investment in defence capability. The SBAC survey shows UK aerospace directly employs 124,237, an increase of nearly 10,000 on the previous year, supporting a total of 276,000 jobs across the UK economy. The aerospace industry provides high value employment with average salaries of 33,000, some 8,000 more than manufacturing as a whole. The industry also has a strong commitment to developing young people with the survey showing the sector employing 2,700 apprentices. The increase in employment reflects a significant rise in output and has been accompanied by an even greater increase in productivity. Productivity per employee increased by 15 per cent, significantly exceeding the industrys long term trend, and demonstrating the significant investment that is being made by companies in process improvement. There was a welcome 31 per cent increase in R&D spending in 2005, up to 2.7 billion. Investment in the development of new technology is essential for long-term competitiveness and the progress of the National Aerospace Technology Strategy has the highest priority across the sector. The increasing globalisation of the aerospace industry is demonstrated by the continued growth in employment and turnover of UK

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sustainable aviation
a message from the SBAC President continued
companies overseas assets. In 2005 these generated 6.4 billion of sales and close to 43,000 jobs. The US continues to attract the substantial proportion of UK investment overseas, with employment increasing slightly on last year. The continued growth in demand for air travel worldwide presents major environmental challenges. The launch of Sustainable Aviation, the worlds first sustainability strategy for the aviation sector, signalled UK industrys commitment to delivering environmental improvement, alongside the economic and social benefits of air travel. The UK aerospace industry is a dynamic and globally successful sector, the intense efforts by industry and Government to address longterm competitiveness issues through the Aerospace Innovation and Growth Team process is beginning to pay dividends. There remains much still to do and during 2006 SBAC continues to focus on improving skills, raising productivity and increasing investment in R&D. Air travel is an integral part of modern life, vital to the global economy and valued by the travelling public. The continued growth in the demand for air travel worldwide presents major environmental challenges. The launch of the Sustainable Aviation strategy, the worlds first sustainability strategy for the aviation sector, signals UK industrys commitment to deliver environmental improvement, alongside continued economic growth and social responsibility. aviations impact on the environment and was developed by the UKs leading airlines, airports, aerospace manufacturers and air traffic controllers. This pioneering initiative, unique in global aviation, commits UK companies to a joint strategy to deliver radical cuts in carbon dioxide emissions, nitrogen oxide emissions and aircraft noise over the next 15 years. The Sustainable Aviation strategy establishes mechanisms for monitoring and regular reporting of progress toward a range of specific objectives. These include:

Chris Geoghegan President SBAC & Chief Operating Officer BAE Systems

air travel and climate change Globally, air travel represents about 2 per
cent of manmade carbon dioxide (CO2) emissions.

Total departing flights from UK airports represented 6 per cent of total UK CO2 emissions in 2004. Total UK CO2 emissions are about 2 per cent of global emissions.

Limiting climate change impact by improving fuel efficiency and CO2 emissions by 50 per cent per seat kilometre by 2020 compared with their 2000 equivalents. Improving air quality by reducing nitrogen oxide emissions by 80 per cent over the same period. Lowering the perceived external noise of new aircraft by 50 per cent by 2020 compared with their 2000 equivalents. Establishing a common system for the reporting of total CO2 emissions and fleet fuel efficiency by the end of 2005, and pressing for aviations inclusion in the EU emissions trading scheme at the earliest possible date. Airport plans for community-related noise limitations, including landing and take-off restrictions where necessary.

2004
turnover in UK bn turnover in rest of world bn new order intake bn employment R&D expenditure bn export sales bn export percentage operating prot margin trade balance* bn
source SBAC except * DTI

2005
22.67 6.47 30.79 124,237 2.70 15.17 67% 6% 2.25

change
(in real terms)

18.10 5.07 23.07 114,345 2.07 11.76 65% 5% 3.34

25% 28% 33% 9% 31% 29%

environmental track record Industry has delivered a 50 per cent


improvement in fuel efficiency in the last 30 years.

Industry has delivered a 75 per cent reduction in noise nuisance in the last 30 years. Through the introduction of quieter planes the noise contour area around Heathrow has shrunk - reducing the population exposed to significant disturbance by 85 per cent between 1974 and 2000.

12% -33%

sustainable aviation
Sustainable Aviation is a comprehensive programme for long-term reductions in

Further information on the Sustainable Aviation strategy can be found at www.sustainableaviation.co.uk

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revenue
figure 1 UK aerospace industry sales and employment 1980 - 2005
Sales increased by 25 per cent real terms in 2005 to 22.67bn, driven by increases in the civil and defence sectors. Employment increased 9 per cent to 124,237.

figure 2 UK aerospace industry real growth of sales civil and defence 1980 - 2005
Since 1980, the civil sector has been the engine of growth and this year it continued the trend with an 18.3 per cent increase, well above the long term trend rates of 4.7 per cent per annum. Defence increased by 31.8 per cent, well above trend which has been static in real terms.

civil
sales (lhs) 22.67

defence

baseline

employment (000s)

sales (2005 bn)

employment (rhs) 124,237

year

1980 = 100

year

source: SBAC

source: SBAC

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figure 3 UK aerospace industry sales by activity 1980 - 2004


Defence sales of 12.2bn exceeded civil sales by 1.6bn. For the second consecutive year defence sales exceeded civil sales increasing to 54 per cent.

figure 4 UK, EU and USA aerospace industries sales to their own governments 1980 2005
Sales to the UK government increased by 21 per cent to 4.1bn. However, the UK aerospace industry (UKAI) remains less dependent on sales to its national government at 17.8 per cent compared to USA at 54.3 per cent and the EU average of 27.2 per cent (2004 figure).

civil

defence

sales to Government - EU average sales to US Government sales to the UK Government

% of turnover

civil - 46%

% of turnover

defence - 54%

year

year

source: SBAC

source: ASD, AIA, SBAC

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figure 5 UK aerospace industry growth from 2004 to 2005


Sales increased by 25 per cent real terms in 2005 to 22.67bn, however different areas had different patterns: - Civil domestic market remained relatively static with only 2.3 per cent growth. Exports fared better by increasing 26.9 per cent. - Defence domestic sales increased by 30.3 per cent from last year driven by growth in demand from both the UK government and other aerospace companies.

figure 6 UK aerospace industry sales by type and region


The figure below shows the relative contribution of the civil and military markets to the UKAI. 67 per cent of sales were exported, continuing the long term trend of dependence on exports.

30

total turnover 2005: 22.67 bn


2004 2005 growth per item

25

total 2004: 18.10 total 2005: 22.67 (in real terms)

defence domestic

24%

turnover (2005 bn)

contribution to total growth


20

civil exports

37%
defence exports
15

30%

10

civil domestic
0

9%
total civil domestic civil exports defence domestic defence exports

exports: 67% civil: 46%

source: SBAC

source: SBAC

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figure 7 UK aerospace industry sales by product group


Aircraft equipment rose by 60 per cent from 4.1bn to 6.56bn, showing the biggest single sector increase. Aircraft engines also enjoyed a successful year with a 39.8 per cent increase in sales to 6.83bn. Missiles sales increased by two thirds to 1.5bn. Space had its second consecutive year of growth, increasing to 603m, up 38 per cent on last year. Aircraft systems and frames decreased by 6.3 per cent to 7.19bn from last year.

figure 8 UK aerospace industry sales by customer(1)


The global aerospace industry is relatively unusual in having only a few possible end users of whom almost all are either airlines or governments. Sales to all destinations showed significant growth, in particular USA and rest of the world showed significant increases of 44 per cent and 33 per cent respectively.

aircraft maintenance

helicopters

8%

3.1%

sales to the rest of the world


4.68bn
+ 44%

4.83bn
+ 33%

UK aerospace industry
5.66bn
+ 13%

4.08bn
+ 21%

sales to the UK Government


3.42bn
+ 15%

aircraft equipment

30%

aircraft systems & frames

large civil aircraft

24%
aircraft engines

7.1%
sales to the USA
regional jets

sales to the EU

other sales in the UK

28%

2.0%

space

other and business jets

3%
missiles defence aircraft

0.3% 11.5%

7%

total turnover 2005: 22.67 bn

total aircraft and frames: 7.19 bn

source: SBAC

source: SBAC
(1)

Sales to UK Government: This includes national authorities like government, ministries, UK public research institutes, national space agency.

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figure 9 UK aerospace industry maintenance turnover by company 1996 - 2005


Maintenance, repair and overhaul (MRO) sales increased by 6.0 per cent to 6.45bn. This year, for the first time, SBAC was able to separate maintenance companies, service providers (such as consultancies or facilities management) and aerospace manufacturers. Aerospace manufacturers MRO increased by 9.3 per cent in 2005 to 4.3bn. Service providers and maintenance specialists decreased by -14.4 per cent to 1.74bn continuing the trend of aerospace maintenance being undertaken by the original equipment manufacturer.
7

total maintenance turnover 2005: 6.07bn


6

service providers maintenance companies

turnover (2005 bn)

aerospace manufacturers

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

source: SBAC

year

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orders
figure 10 UK aerospace order intake by type and sector 1997 - 2005
Total orders increased by 33.5 per cent to a new record of 30.79bn. All three sectors saw significant increases in their orders. Orders were split evenly between civil and defence sectors with 49.7 per cent civil and 50.3 per cent defence. New orders represented 135.8 per cent of sales in 2005.

figure 11 UK aerospace order intake by destination


UK orders saw a 61 per cent increase, driven by significant new orders for BAE Systems, Selex Communications, Rolls-Royce, Serco, Thales Aerospace, Lockheed Martin and AgustaWestland. European orders saw a -10 per cent fall to 6.61bn, but this was from a high in 2004 and represents a 50 per cent growth from 2003. This year it has been possible for SBAC to split orders by USA and rest of the world (previously the category was outside European Union), this saw a 49.6 per cent increase. Orders from the USA are worth 8.1bn and orders from rest of the world 6.2bn.

35

30

total order intake 2005: 30.79bn

engines quipment
30

total order intake 2005: 30.79bn

from rest of world from USA from outside EU

order intake (2005 bn)

25

order intake (2005 bn)

systems & frames

25

from other EU from UK

20

20

15

15

10

10

5
5

1997

1998

1999

2000

2001

2002

2003

2004

2005

1997

1998

1999

2000

2001

2002

2003

2004

2005

year

year
source: SBAC

source: SBAC

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financial
figure 12 selected financial UK aerospace financial results 2005
The increases in sales are reflected in the improved performance of selected UK companies with a 12.4 per cent real increase in sales and operating profit at 10.0 per cent.

figure 13 UK, EU and US aerospace industry operating margins 1985 - 2005


Whilst there has been improvement in the level of profitability to 5.5 per cent this year, the UK industry as a whole still lags behind the EU and US average profitability levels.

company

division
2005 m

turnover
2004 m 13,222 4,414 569 2,678 979 477 311 2003 m 12,572 4,092 1,549 2,629 833 399 284

operating profit
2005 m 1,182 634 54 420 177 102 51 2004 m 1,016 373 38 350 150 82 40 2003 m 980 130 349 135 76 34

UK operating profit margin EU operating profit margin US operating profit margin

BAE SYSTEMS Plc Rolls-Royce Plc GKN Plc Smiths Group Plc Cobham Plc Meggitt Plc Ultra Electronics Plc

group civil aerospace, defence aerospace group group group group

15,411 4,923 627 3,017 1,090 616 342

% operating profit margin

285

sample total

26,026

22,649

22,358

2,620

2,049

1,989

-1

-2 1985 1990 1995 2000 2005

year

source: SBAC

source: SBAC ASD, AIA

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research and development


figure 14 UK aerospace R&D expenditure by type 1996 - 2005
Research and development (R&D) intensity averaged 12 per cent of total sales, 2.7bn up 31 per cent on 2004. 36.7 per cent or 0.99bn was spent on civil R&D and 63.3 per cent was spent on defence related R&D. For the purpose of this survey, R&D was defined to comprise: - Development activities leading to series production. - Research and technology (R&T) activities which represent all those R&D activities which are not directly attributable to products. They can thus be regarded as generic technologies that are designed to maintain or expand the technological basis.

figure 15 UK aerospace industry R&D expenditure source


Self financed R&D was worth 0.89bn, 74.6 per cent of which was for the civil sector. However, UK government funded R&D has the reverse pattern with 81.6 per cent being for the defence sector. Overall the trend was for externally funded R&D to be heavily defence dependant with 87 per cent (1.38bn) funded this way. For the first time, this year SBAC asked about R&T activities, this came to 211.1m split evenly between civil and defence.

3.0

3.0

2.5

total R&D spend 2005: 2.49bn total R&T spend 2005: 0.21bn
civil

2.5

total R&D spend 2005: 2.49bn total R&T spend 2005: 0.21bn
civil

R&D spend (2005 bn)

2.0

defence

R&D spend (2005 bn)

2.0

defence

1.5

1.5

1.0

1.0

0.5

0.5

1996

1997

1998

1999

2000

2001

2002

2003

2004

year
source: SBAC

2005 R&T + R&D

total

self-financed

by UK

by other government

by others

R&T alone

source: SBAC

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figure 16 UK aerospace industry R&D expenditure 2000 2005


46 per cent of the total UKAI R&D expenditure was undertaken by the aircraft and systems sector. The equipment sector R&D expenditure increased significantly by 21 per cent to 646m, significantly above the four year average of 503m.

figure 17 UK aerospace R&D undertaken in the UK and overseas


In the last few years there has been increasing interest in the levels of R&D in aerospace being undertaken outside the UK, by UK companies. SBAC data indicates there is a long term increase from 0.14bn in 1996 to 0.45bn in 2005. However, as the data below shows, it does jump significantly from year to year.

3.0

3.5

aircraft
2.5

engines

equipment

overseas R&D
3.0

R&D spend (2005 bn)

R&D spend (2005 bn)

UK based R&D

2.5

2.0

2.0

1.5

1.5

1.0
1.0

0.5

0.5

2000

2001

2002

2003

2004

2005

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

year

year

source: SBAC

source: SBAC

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figure 18 Technology and first product application life cycle


R&D is a very long term investment. UK firms are still benefiting directly from investment in generic technology made in the late 1950s and 1960s (eg wing aerodynamics and fundamental engine technology which fed into the complete range of Airbus and RB211/Trent engine families). The timescale between research and implementation of new products can be as much as 20 years.

figure 19 aeronautic research programme funding


The R&D process involves a number of public and private agencies, companies, national research organisations and academia. It also requires sophisticated, complex and expensive research infrastructure such as wind tunnels and test facilities. Government support for aerospace research from all sources, including the regions, is brigaded through the DTI Technology programme following implementation of the Innovation Review. This is expected to result in an increasing trend of government support for aerospace research in future years.

technology taken up by industry 5+ years 3-10 years

technology validated

product launch 2-6 years

product certification

40

25+ years series production & product support

actual figures
35

projected figures
30

technology readiness

R&D

2005 million

contract negotiation selection process technology selected for application by customer technology demonstration technology acquisition Fundamental research

pre-production product & process validation design & development

25

20

15

10

R&T

science base: universities, industries & other research bodies

0 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08

year
source: AeIGT source: DTI, note CARAD payments have been included in these figures

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employment
figure 20 European employment by country 2005
The majority of the European aerospace industry is located in the UK which is highlighted by the fact that 26 per cent of all aerospace jobs in the EU are within the UK. Employment in the UK in 2005 increased by 9 per cent to 124,237 and is 4 per cent higher than in France and 38 per cent higher than in Germany.

figure 21 aerospace sales per employee 1980 - 2005


Employment increased by 9 per cent in 2005. When compared to the 25 per cent real terms increase in sales, this is a relatively modest increase. This created a second year of substantial growth in productivity per employee, 15 per cent in real terms to 182,500 per employee, well above the long term 5 per cent per annum growth.

140

200

180

total: 457,000 employees


100

turnover per employee (2005 '000s)


e st ria ar k nl an d ur g ga l re ec rtu nm Fi G Po Au De m bo

120

160

employment 000s

140

80

120

100

60

80

40

60

20

40

20 0

lg ui m

do m

ce

ic

ly

Ire la nd

nd

Sp ai

Fr an

Po la

Sw ee

Ki ng

th e

Be

er

Re

pu

rla

Ita

de

nd

an

bl

Ne

ec h

ite

Un

Cz

country

Lu

1980

1985

1990

1995

2000

2005

xe

year

source: SBAC estimate

source: SBAC

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figure 22 UK aerospace employment by sector


It is estimated that a further 152,000 people are indirectly supported by the aerospace industry. Total UK aerospace employment was, therefore, in the region of 276,000 in 20051. Aircraft and frames account for 42 per cent of the UKAIs activity, in terms of employment. This is complemented by equipment at 31 per cent and engines at 27 per cent.

figure 23 UK aerospace industry employment by qualification and activity


The UKAI has consistently maintained a range of long-term, highly skilled jobs. In 2005, 34 per cent of all UKAI employees held a university degree or equivalent. 33 per cent of employees (41,788 employees) were classified in the new class of technicians. 2,719 employees, or 2 per cent of the workforce, were apprentices.

total: 124,237 employees

Production was the largest single group of employees (55 per cent or 68,355 employees).
80

engines

27%
70

total: 124,237 employees

production & maintenance

60

55%

42%
equipment

employees (000's)

aircraft & systems

50

31%

graduate engineers & managers

technicians others

rest

40

32%
30

20

34%

33%

31%

R&D

10

13% apprentices 2%

by product segments

by activity

source: SBAC
1

Research by Oxford Economic Forecasting in The economic contribution of BAE Systems to the UK has suggested an employment multiplier for the aerospace industry of 1.22.

source: SBAC

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figure 24 UK aerospace wages compared to selected industries 2005


Average wages in the aerospace sector were 33,645 per annum in 2005, 43.7 per cent higher than the UK average wage and 31.6 per cent above the manufacturing average wage. Aerospace wages are relatively closely distributed (ie the majority earn around the average wage) compared to the economy as a whole, and in particular the financial services, where a few high earners skew the average figure upwards.

50,000

average (mean) median


40,000

43,003

annual earnings

33,645
30,000

29,013 25,566 23,400 22,027 18,961 25,266

20,000

10,000

whole economy

manufacturing

manufacture of aircraft and spacecraft

financial intermediation

source: ONS, ASHE 2006

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SMEs
figure 25 UK aerospace industry by company size 2005
Small and medium sized enterprises (SMEs) saw total sales fall by 28 per cent to 332m. The UKAI is characterised by a significant proportion of SMEs, 46 per cent of all companies surveyed by the SBAC were SMEs. However, estimates suggest that there may be up to 2,500 aerospace SMEs in the UK, of which only a small percentage were picked up in this survey. An SME is defined as a company having less than 250 employees, less than 30m turnover and less than 25 per cent external ownership (in terms of voting rights). SBAC only uses the employment criterion here. Of the companies surveyed by SBAC, 49 per cent were defined as SMEs by number of their employees.
50

figure 26 UK SME aerospace sales 1997 - 2005


Since 1997 SMEs saw their sales increase significantly to a peak in 1999 at 652m, followed by a sharp decline (49.1 per cent over 6 years), to todays 332m. Defence sales have remained remarkably consistent averaging around 143m per annum, with one exception in 2004.

700

SME's
600
40

total SME sales: 332 million


total defence total civil
500

(%) of all companies

30

sales (2005 m)

400

300

20

200
10

100

<250

250-999

1,000-9,999

10,000+

1997

1998

1999

2000

2001

2002

2003

2004

2005

number of employees in company


source: SBAC source: SBAC

year

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figure 27 aerospace respondent company size 1999 & 2005


This change in sales is reflected in the decrease in the number of respondents: in 1999, 70 per cent of respondents where SMEs whereas in 2005 this had fallen to 47 per cent.

figure 28 UK aerospace industry SME turnover by type and destination 2005


In 2005, the UK supply chain reversed the unusual trend, seen in 2004 of a 50:50 defence/civil split, and returned to the more usual 60:40 civil dominance.

1999
250 - 1,000 employees 250 - 1,000 employees

2005

Exports are still low, compared to the industry as a whole, with only 38 per cent, compared with 67 per cent UK aerospace average.

19%
1,000 - 10,000 employees less than 250 employees

28%

total turnover 332m


less than 250 employees

10%
10,000+ employees

70%

1,000 - 10,000 employees

civil exports

46%

23%

25%

1%

SME sales: 652m


10,000+ employees

SME sales: 332m


3%
civil domestic

36%
defence domestic

999
250 - 1,000 employees

2005

26%

28%
less than 250 employees less than 250 employees

defence exports

70%

1,000 - 10,000 employees

46%

13%

23%

SME sales: 652m


10,000+ employees

SME sales: 332m


3%

source: SBAC

source: SBAC

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figure 29 UK aerospace SME sales by destination


5 per cent of sales, or 17m, was sold directly to the UK government, below the UKAI average of 18 per cent. This is in part reflecting the nature of SMEs products as suppliers of components rather than complete pieces of equipment. 67 per cent of sales were within the UK.

total turnover: 322m

sales to EU

20%

in the UK sales to USA

12%
sales to rest of world

57%

6%
sales to UK Government

5%

source: SBAC

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international trade
figure 30 UK trade balance of aerospace 1996 - 2005
In 2005, UKAI exported over 67 per cent of its total sales, worth 15.17bn. This was a 29.0 per cent increase. It is important to note that the trade balance figures come from government and therefore represent the trade in all aerospace goods to and from the UK and not just the UKAI. They include the purchase of aircraft by UK airlines and the sale of second-hand aircraft to the rest of the world, and are therefore different to the SBAC survey figures. UKAI this year contributed net 2.25bn to the trade balance, representing a fall of 33.8 per cent on last year. However the long term average remains at 2.8bn per annum positive balance.
18 imports 16 exports balance 14
5 6 7 imports exports
balance

figure 31 UK trade balance of aerospace by destination 2005


Employment increased by 9 per cent in 2005, when compared to the 25 per cent real terms increase in sales, this is a relatively modest increase. This created a second year of substantial growth in productivity per employee, 15 per cent in real terms to 182,500 per employee, well above the long term 5 per cent per annum growth.

trade (2005 bn)

10

trade (bn)

12

0 Americas Asia & Oceania European Union Middle East & Africa
Other Europe

-1

0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

-2

year
source: SBAC analysis of DTI data source: SBAC analysis of DTI data

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global trends
figure 32 global sales and employment of UKAI aerospace assets
UK based companies have substantial overseas presence, which generated a further 6.47bn of sales and employed a further 42,919 people. The majority of the overseas assets are in the USA which accounted for 5.22bn of sales and 33,699 employees.

figure 33 global location and sales in the UKAI 2005


The size of the UK aerospace industry presence overseas has increased significantly over recent years. In broad terms, the size of the overseas assets owned by the UK is now equivalent to the worlds sixth largest aerospace producer.

UKAI in USA
sales (bn): employment: 5.22 33,699

UKAI in UK
sales (bn): employment: 22.67 124,237

location UK sales (bn) 14.83 77,099 7.84 47,138 22.67 124,237 rest of the world 6.47 42,919 n/a n/a 6.47 42,919 total 21.30 120,018 7.84 47,138 29.14 167,156

sales (bn): employment:

29.14 167,156

ownership

UK rest of the world

global UKAI

employment sales (bn) employment sales (bn)

UKAI in rest of world


sales (bn): employment: 0.87 5,332

UKAI in rest of EU
sales (bn): employment: 0.38 3,888

total employment

source: SBAC

source: SBAC

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notes
figure 34 UK aerospace ownership of UK located companies turnover and employment
There are a number of overseas companies which have directly invested or purchased and incorporated indigenous firms. In 2005, foreign owned UK located companies generated total sales of 6.47bn and employed 42,919 people.

28

180

total turnover: 22.67bn


UK turnover (Ihs)

employment: 124.237
non UKAI turnover (Ihs)
foreign UK employment (rhs)
140 160

24

UK owned employment (rhs)


20

turnover (2005 bn)

120 16

100

12

80

60 8 40 4

20

1998

1999

2000

2001

2002

2003

2004

2005

year

source: SBAC

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employment (000s)

notes