This report analyses the sentiment, challenges and changing macro landscape for UK companies supplying products and services to the fast-growing and increasingly demanding global aerospace sector.
BDO, accountants and business advisors, have produced the following Aerospace Report in collaboration with the Institution.
The survey’s findings revealed strong positive sentiment in the aerospace sector, but the bald numbers belie some serious concerns about the UK’s position. Issues with long-term agreements, productivity levels, availability of correctly skilled people and the rise of Asia as an aerospace powerhouse conspire to negate any complacency.
Key recommendations
1. Globalisation via regionalisation
The changing regional hub pattern of global aerospace should be recognised, with manufacture and MRO services following these hubs in Singapore, China, Mexico and the US.
The government needs to better understand what the UK can successfully compete for in this new world order, so that it can pick its battles with the most available intelligence.
2. The importance of British mid-sized companies to retain domestic UK capability of designing and supplying key components in big aero programmes
When a new aero-platform is devised or an existing one is modified, British companies as well as UK-based divisions of foreign companies will be able to bid for the work on par.
Specific help for mid-sized companies with the ambition to expand overseas should be considered, such as higher investment tax relief for the first two years.
3. Listen to the case for a national strategy in through-life engineering services
(As proposed by the EPSRC Centre in TES led by Cranfield University.)
The evidence is building that with the right steps, the UK can develop a strong comparative advantage in providing MRO services (a growing global market) that has three key side-benefits: supporting industrial sustainability, providing high-value jobs and GDP and enabling a more multi-skilled workforce, fluent in Big Data techniques, to be adaptable to both manufacturing and service-sector jobs.