Industry experts expect a return to growth in 2017 following a year of flat revenues with commercial U.S. aerospace up at least 2% and defense more than 3% higher.
The Accenture Commercial Aerospace Insight Report, launched in 2016 and updated quarterly, examines trends and market drivers for the next 6 to 18 months.
“We’ re seeing 2016 will be flat compared to 2015, and 2017 will be up 2.3% over 2016,” says Jeffrey Wheless, global lead for aerospace and defense industry research for professional services company Accenture. The outlook uses econometric data and surveys of executives at OEMs, Tier 1, and Tier 2 suppliers for insights on future supply and demand.
“Instead of focusing solely on original equipment manufacturer (OEM) sales, the report covers a wide range of activities, from suppliers to maintenance, repair, and overhaul (MRO),” Wheless explains. “As was the case for 2016, we are forecasting a challenging first quarter in 2017, with the rest of the year spent offsetting 1Q17, resulting in an overall better year.”
The latest report notes that flat production capacity, coupled with the continued production ramp-up, will put pressure on costs and drive additional investments in efficiency, production automation, cost visibility, and supplier development.
“It’s a sustained production increase – not a bump – so everyone is taking a combination of workforce and technology to increase their capacity utilization and capacity expansion,” Wheless tells Aerospace Manufacturing and Design. This includes workforce flexibility – workers doing multiple jobs, not just specialized tasks – and automation.
According Accenture’s Technology Vision 2016 survey of aerospace executives, 81% are planning moderate to extensive production automation.
“Collaborative robots don’t displace workers, but help them do their job better, achieve higher throughput and quality, and cut the amount of rework,” Wheless reports. “People tend to see automation as robotics, but we’re also seeing more advanced technologies such as augmented reality – smart glasses, virtual-reality goggles – helping folks do jobs faster and with higher levels of quality.”
He also sees interest in machine learning and artificial intelligence in processes. “How do I manage production capacity, do it intelligently, and how do I better sell in the market? Those are examples of technology used to address capacity challenges, not by adding production capacity, but by increasing utilization.”
The report notes that while there has been some belt-tightening and furloughs at a few companies, production capacity and employment are both relatively stable. Both are expected to increase during 2017. Materials costs are expected to remain stable through 2017, with some executives expecting them to rise in 2018.
The slowdown in aircraft retirements due to lower fuel costs is driving MRO activities for OEMs and tier suppliers.
“We see incremental growth on the order of 3% per year,” Wheless says. Additional shop visits for older airplanes will provide more opportunity for cost-competitive third-party MROs. www.accenture.com
A supporting view
Deloitte LLP’s 2017 Global Aerospace and Defense Sector Outlook reports commercial aerospace revenues have remained flat despite increased production levels, and the backlog of roughly 13,500 commercial aircraft – an all-time high – represents more than 9-1/2 years of current-rate annual production. For aerospace and defense (A&D), global industry revenues are estimated to grow at 2.0% in 2017.
The outlook also notes that commercial aircraft production will likely increase, driven by stable global gross domestic product (GDP), strong airline passenger traffic, and continued airline profitability supported by lower fuel costs. Experts warn, however, that despite an expected 96 additional large commercial aircraft produced in 2017, continued pricing pressure and product mix changes by airline operators will likely produce only a 0.3% increase in commercial aerospace sub-sector revenues.
Despite those flat revenue projections, Deloitte analysts expect commercial aerospace subsector operating earnings to grow 20.6%, while defense subsector’s operating earnings will likely rise 7.0%. Defense revenues are expected to grow at 3.2% in 2017 after multi-year declines.
“This increase is due to continued concerns about global security threats; growth in U.S. defense budgets; as well as higher defense spending in the Middle East, Japan, South Korea, and India,” says Tom Captain, Deloitte’s global aerospace and defense leader. www.deloitte.com/us
About the author: Eric Brother, senior editor of AM&D, can be reached at 216.393.0228 or firstname.lastname@example.org.
GHP-series single-, double-, and triple-stage National Electrical Manufacturers Association (NEMA) gearheads and GHC units use a two-piece design with up to 30hp capacity. Mounting arrangements include up to a NEMA 256 and specials can be produced to International Electrotechnical Commission (IEC) specs.
GHP and GHC gearheads can be used for a range of material handling equipment. Lightweight aluminum housings reduce weight by up to 50%, creating a premium power density. GHP planetary gearheads are up to 40% shorter than conventional models.
SiP System automated alignment engines for silicon photonics applications include 3- to 6-axis mechanisms, controllers with firmware-based alignment algorithms, and software tools. Designed for high-accuracy demands of packing, planar testing, or inspection applications, the stiff, stacked, multi-axis systems and parallel-kinematics 6 degrees of freedom (DoF) systems achieve alignment times of less than 1 second for single and double-sided alignment tasks. All axes are driven by one controller or software interface using one global coordinate system.
Worldwide spending on robotics and related services will more than double by 2020, growing from $91.5 billion in 2016 to more than $188 billion in 2020, according to the updated Worldwide Commercial Robotics Spending Guide from IDC.
More than half of all robotics spending comes from manufacturing, with discrete manufacturing delivering 31% and process manufacturing providing 28% of the worldwide total in 2016. This situation will remain relatively unchanged throughout the forecast with the two industries investing nearly $110 million in robotics in 2020. The leading robotics uses in discrete manufacturing are assembly, welding, and painting.
“Robotics is now an integral part of industry transformation, which has brought about significant improvement in operational agility and efficiency in both developed and emerging markets,” says Jing Bing Zhang, research director, robotics at IDC Manufacturing Insights.
Purchases of robotics systems, which include consumer, industrial, and service robots, and after-market robotic hardware will total more than $40 billion in 2016. Services-related spending, applications management, education & training, hardware deployment, systems integration, and consulting – will come to more than $20 billion in 2016. The fastest growing segments of robotics spending are drones and after-market drone hardware, which will grow to nearly $20 billion in 2020.
Asia Pacific (APAC), including Japan, will account for more than two-thirds of total robotics spending throughout the forecast. Europe, the Middle East, and Africa (EMEA) is the second largest region with expenditures of $14.7 billion in 2016, followed by the Americas with 2016 spending at $12.9 billion. Robotics spending will more than double in APAC throughout 2015-2020, making it the fastest growing region followed by the Americas, which will edge ahead of EMEA in total spending by 2018.
Director Frieder Gaenzle cuts the ribbon at the grand opening of Zimmermann Inc.’s newly constructed 13,200ft2 showroom, warehouse, and office building at 30587 Century Dr., Wixom, Michigan, as President Matthias Tockook watches. The facility will allow the Stuttgart, Germany-based milling solutions provider to support U.S. aerospace and automotive customers, says Cornelius Kiesel, vice president of sales and administration. Plans are for two of the company’s large vertical machining centers and one horizontal center to be installed in the showroom by year-end. www.zimmermann-inc.com
Painting, coating robot
Rochester Hills, Michigan-located Fanuc America Corp. recently demonstrated sanding, washing, and drying an aircraft fuselage with its P-350iA/45 painting and coating robot. The 6-axis, 45kg payload robot is Class 1, Division 1-approved for operation in hazardous environments. Its 2,606mm reach allows operation in tight work spaces. www.fanucamerica.com
Aero composites market to $32B by 2021
Research firm MarketsandMarkets forecasts the aerospace composites market will reach $32.35 billion by 2021, up from $19.38 billion in 2015 at a compound annual growth rate of 8.95%.
Production of wide-body commercial aircraft made with significant carbon fiber composite content is driving demand, as are cost reductions in precursor raw materials in carbon fiber manufacturing. Composites manufacturers’ capacity expansions during the past five years are expected to continue.
North America accounts for the largest market share in aerospace composites globally. Its market dominance is expected to continue due to the rise in aircraft deliveries and increases in the U.S. defense budget. Composites’ light weight and contribution to fuel efficiency are boosting demand as airlines replace old aircraft with new commercial aircraft and engines. www.marketsandmarkets.com
Largest TUR-MN/CNC lathe is operating in the US
The largest TUR lathe recently installed in the U.S. is a TUR3000, built for Ellwood City Forge in Ellwood City, Pennsylvania. The TUR3000x22M lathe processes massive forgings requiring large turning torque. Part of the FAT-Haco Group, TUR first assembled the horizontal turning center in Poland.
This winter marks Aerospace Manufacturing and Design’s 10th anniversary. In 2007, civil aviation was bouncing back from the aftermath of 9/11 and predictions were positive: “The aerospace and turbine industries are looking at good years ahead; people are flying more, and demand for new aircraft is growing.” The forecast was accurate – despite the global recession that dented economic growth from 2008 to 2010 and volatile oil prices. Where 10 years ago, Boeing analysts predicted a need for a global airline fleet of more than 35,000 airplanes by 2024, that projection has grown to more than 43,500 by 2036 – adding 700+ for each of the additional 12 years.
Ten years ago, airliner production in Asia was just talk – today final assembly lines in China are becoming a reality for Boeing and Airbus. Composite jetliners consisted of one model of Boeing 787 Dreamliner – now the type comes in three fuselage lengths with more than 500 examples already delivered. Airbus was just launching its own carbon-fiber-content wide-body A350 XWB – it’s now available in three variants, with more than 60 in revenue service.
The past decade defied cyclical upturns and downturns in aircraft demand. Jetliner deliveries rose almost steadily (just two dips in the chart) from $60 billion in 2007 to more than $100 billion in 2015 in constant dollars, part of what Teal Group Vice President of Analysis Richard Aboulafia describes as a 12-year (2004 to 2015) super cycle with compound annual growth rate of 9.2%.
What about the next decade? With the duopoly’s combined commercial order backlog of nearly 12,600 airplanes, there should be plenty of business for years to come – if suppliers can keep up with increased production rates.
Technologically, we should see the continuation of today’s trends: automation, composite construction, exotic materials, connectivity, and additive manufacturing (AM). Orders are already in the books for aircraft and jet engines that will use more carbon- fiber and ceramic-matrix composites and new aluminum and titanium alloys. AM is moving toward production parts in metal, spurred by advances pioneered by major aircraft and turbine engine producers. Large factories and small shops are leveraging machine data to be more efficient and reduce costs. And automation promises – or threatens – to have the most wide-ranging impact on aerospace manufacturing during the next decade.
Many tasks routinely involving manual labor will be done by robots. Large robots will perform composite fiber lay-up or rivet fuselage skins; and small, collaborative robots will help machinists move bulky parts or do repetitive finishing tasks. Automation may ease the looming shortage of trained machinists, since fewer people will be needed – or it will simply displace a shrinking cohort of skilled humans with machine-optimized methods. We’ve seen similar transformations in steel-making and automobile assembly.
Within the next 10 years, we may begin to realize designs of hybrid-electric air- liners – even if the electrification is limited to taxiway propulsion. Commercial spacecraft operators advertising satellite and rapid cargo delivery may become routine – along with sightseeing flights to the edge of space. But, more than likely, most commercial passengers will still be traveling in tube-and-wing, twin-engine airplanes, refinements of aircraft designs flying today. Is your vision similar? I welcome your comments. – Eric