The A&D aerospace and defense sector is experiencing growth of demand unlike any other period in history. This unprecedented demand fetches enormous requirements for A&D machine workshops along with service subcontractors. This demand is primarily attributed to the enormous backlog of aircraft orders, accelerated activity in space, and the continuous shift of various manufacturing industries back to the United States.
Unmatched Aircraft Backlogs: Years of Shortage of Supply
The enormous backlog of aircraft orders from industry leaders like Boeing and Airbus is the primary driver behind the increase in demand. By the end of 2024, Airbus reported a firm backlog of 8658 aircraft. It would take Airbus and Boeing almost a decade and a half to fulfill these orders at the current rate of delivery. Boeing was not far behind with a backlog of 5595 aircraft orders, which would take 17.9 years of production to deliver at current 2024 delivery rates. Even though Boeing is expected to improve its delivery schedule, the volume of pending orders will guarantee a demand in aircraft manufacturing for decades to come.
The Race for Space 2.0: Explosive Growth in the Launch Industry
One more factor, very important but ignored, is the cosmonautic activity throughout the globe. The number of space launches increased sharply from 244 in 2014 to 586 in 2019 and then surged to 2,849 in 2024, according to the United Nations Office for Outer Space Affairs. The increase is almost twelvefold over a decade and is attributed to SpaceX’s Starlink plans to deploy satellites into low earth orbit and Amazon’s Kuiper project to place 3,232 satellites into medium earth orbit (MEO). This increased economic activity will require additional subcontracting and manufacturing for space-related parts and constituents.
Re-shoring Policy: A Surge in Domestic Production
The demand from aircraft and space businesses is further aggravated by the Trump administration’s push for re-shoring manufacturing to the United States. This effort also focuses on the production processes of raw materials, specialized parts, and even entire components as cast for aircraft assemblies. There is an expected positive outcome on the volume of A&D machine shops work if the reshoring steps are taken.
Specialized Subcontracting: A Critical Role
The A&D industry machine shops provide specialized subcontracting services that include, but are not limited to, protective coating application, heat treating, and ultrasonic test inspection. Specialized subcontracting services like these are crucial in the manufacturing process to ensure quality and durability standards. Protective coatings, for instance, are vital in preventing wear and corrosion, while heat-treating services further enhance the machines’ attributes, adding to their durability. The demand for these specialized contracting services has been on the rise due to the backlog in aircraft production, increased space activities, and re-shoring business modifications.
Job Growth and Increased Output: Economic Indicators
Within the A&D Supply Base, the demand for A&D machine shops is shifting toward a growing trend due to fresh economic blood in the industry; the machine shop sector as a whole has seen increased employment opportunities. The job count in the US machine shop industry has gone up from 262,000 in the year 2021 to 277,000 in 2023, showcasing an improvement in the sector’s sales post-COVID recovery period. Furthermore, the financial yield from US machine shops increased from $36 billion in 2020 to $40.6 billion in 2021, which indicates a 12 percent increase within a single year.
A Golden Age for A&D Machine Shops
These remarkable opportunities for A&D machine shops can be attributed to unprecedented aircraft backlogs, rapid advancement in the space sector, and reshoring efforts. These, combined with other initiatives, have given them foresight for sustained growth.
