AL: Alabama Aerospace Exports Surge as Industry Growth Gains Pace
15 Jul, 2019
Exports of Alabama-made aerospace products and parts increased in markets around the world last year, as the industry continued to invest in the state. The growth comes amid strategic efforts to expand Alabama’s aerospace presence.
The total value of the shipments, which went to 97 countries, rose to $2.4 billion, a 28 percent increase from the previous year. It’s also nearly $1 billion higher than 2016’s total, according to figures from the Alabama Department of Commerce.
The state ranked No. 12 in the U.S. for aerospace exports, showing the greatest year-over-year increase, except for North Carolina.
“The aerospace industry in Alabama is thriving, with companies developing new technologies and advanced products that are highly sought after by customers across the globe,” said Greg Canfield, secretary of the Alabama Department of Commerce.
“As exports continue to grow, so do the jobs and investments created by these companies in communities around the state.”
Secretary Canfield was among a group of Alabama economic development specialists engaging in pre-arranged appointments with industry leaders at the 2019 Paris Air Show, which kicked off on Monday.
Earlier this year, three firms involved in exporting aerospace products were among the eight winners of the 2019 Governor’s Trade Excellence Awards, offering a glimpse of the success and breadth of the firms and products behind the trade numbers.
Mobile-based Aerostar provides component maintenance on civilian aircraft, with customers in Asia, Europe, Africa and the Americas. The company has grown from two employees in 2011 to 35 now, and it plans to reach 60. Aerostar is targeting new business in Europe, the Middle East, Africa and the Pacific Rim.
Another winner was RMCI Inc. of Huntsville, which developed a system that tracks the mechanical health of aircraft and has analyzed data from more than 3,000 helicopters. RMCI targets business in Colombia, New Zealand, Morocco, Spain, France, Mexico, the United Kingdom, Canada, Singapore, the Netherlands and Malaysia.
And GKN Aerospace-Alabama, a prominent and longtime member of the state’s aerospace industry, continues to flourish in Tallassee, where more than 800 employees produce composite aerostructures for major aerospace industry partners, such as Bell Helicopter, Sikorsky, HondaJet, Airbus, Lockheed Martin, Boeing and GE Aviation.
The trade data for 2018 demonstrate the continuing popularity of Alabama’s aerospace exports, said Hilda Lockhart, director of the Commerce Department’s International Trade Office.
Germany was the top market for exports of Alabama-made aerospace products and parts, as the value of shipments increased nearly 98 percent to $378 million. The rest of the Top 5 looked like this:
India: $348 million, a surge of 110 percent
France: $332 million, an increase of 28 percent
China: $182 million, a jump of 332 percent
Canada: $134 million, a decline of 8 percent
Lockhart said she believes many of the increases are related to military and defense spending.
“With so much tension and unrest in the global marketplace, it seems that many countries are increasing their defense budgets,” she said. “Also, the civilian aircraft market is growing at a very rapid pace, so the global outlook is good.
“The demand comes from the rise in passenger and freight traffic, along with improved global trade.”
The effect of proposed U.S. tariffs on these numbers is uncertain, she added, but the forecasted industry trends are promising.
“In addition to the size of markets growing in this industry, the demand for fleet replacements are expected to help boost aircraft production,” Lockhart said. “Manufacturers are trying to fill backlog orders that remain at an all-time high. There has been an increase in defense spending in China, India and Japan, which is also helping drive the growth.
“Thus, the demand for more aerospace parts will grow and the supply chain will be stretched.”
Among the top-growing future markets for Alabama, Lockhart singled out India, China and France.
Alabama is ranked No. 3 in the U.S. for aerospace exports to India, which included civilian aircraft, engines and parts in 2018.
With a $16 billion market, India is the fastest-growing and currently the ninth largest civil aviation market in the world. By 2025, it is expected to become the third-largest aviation market, and the demand for new aircraft could be as high as 2,000 planes over the next two decades.
Lockhart said the U.S. and India are working together to strengthen trade ties. India wants more connectivity within the country for regional, tourism and medical reasons.
China has the second-largest defense budget after the U.S., and that budget is expected to continue to grow. The country’s aerospace market is forecast at more than $150 billion by 2020.
Alabama’s exports to China have been rising rapidly each year, although they are down 50 percent for this year’s first quarter, amid the ongoing tariff issue.
As for France, Alabama ranked No. 11 in the nation for aerospace exports to this market. The ties between the state and the country keep growing as French aircraft manufacturer Airbus continues to build up its Mobile operations.
Last year, Airbus announced it would add a second production line for A220 aircraft in Mobile. Read an update on the A220 project.
“I’m sure this relationship will grow for two-way trade with Airbus now in the state,” Lockhart said.
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