Trade group: Boeing, aerospace sector to enjoy bright '09

U.S. aerospace sales will rise 4.8 percent next year on higher defense spending and airliner production unencumbered by a Boeing Co. machinist strike that hurt 2008 totals, an industry trade group said today.

Sales may increase to $214.3 billion from an estimated $204.4 billion this year, the Aerospace Industries Association said in its year-end review and annual forecast. The estimated 2009 sales would mark a sixth consecutive record as the industry enjoys the strongest upturn since World War II, the group said.

U.S. defense spending, including war costs, has risen more than 70 percent in the last eight years and the group predicts it will likely increase in the near-term. The eight-week Boeing work stoppage compressed overall industry 2008 sales and the company's full production next year will help comparisons. Orders for airliners in 2009 are locked in with financing mostly in place, alleviating concerns the tight credit market will hurt revenue next year.

"We are in an extremely challenging economic atmosphere, but our industry is proving to be remarkably durable," Marion Blakey, the association's chief executive officer, said in a statement. "We anticipate this to continue."

Industry sales growth this year is estimated at about 2 percent, hurt by the Boeing walkout, the worst performance since a 3.8 percent drop in 2003. The association said its 2009 forecast is about 2.2 percent more than what the industry would have achieved this year had the strike not taken place.

Sales of military aircraft including fighters, transports and helicopters may rise in 2009 by about $2.3 billion, or 4.2 percent, to $57 billion, the trade group said.

Civil aircraft sales will rise next year 7.4 percent to $86.6 billion, the association predicts.

'Long-term Optimism'

Commercial aircraft backlog provides "a measure of long- term optimism for the industry," the group said in a statement. "Boeing alone has a backlog approximately seven times the current production rate."

The sale of missiles will increase in 2009 less than 1 percent, while space sector revenue will rise 2.1 percent, and related products and services will climb 3.6 percent.

Civil aircraft sales in 2008 are estimated to increase less than 1 percent to $80.6 billion, the association said.

Exports accounted for $99.2 billion in 2008 sales and generated a trade surplus of $60.6 billion, "the largest trade surplus of any U.S. manufacturing sector," the statement said.

Average employment in the industry is expected to rise by about 10,000 to 655,500 at the end of 2008, the group said.

The Aerospace Industries Association represents the nation's major aerospace manufacturers including the five largest military contractors: Lockheed Martin Corp., Boeing, Northrop Grumman Corp., General Dynamics Corp. and Raytheon Co.