The aerospace sector is a robust driver of economic growth in the UK
The UK aerospace sector stands as a pinnacle of transport innovation, significantly contributing to the nation's economy and showcasing significant advancements in manufacturing and sustainability. This article highlights the key facts and trends from the 2024 UK Aerospace Outlook report, underscoring the sector's economic impact, sustainability initiatives, regulatory developments, capacity challenges, and its role in the global market.
Economic Impact
The aerospace sector is a robust driver of economic growth in the UK. Between 2013 and 2023, the sector grew by 16%, contributing £10.9 billion to the UK economy in 2023 alone. Key economic indicators for 2023 include:
Employees: 104,000
Turnover: £30.5 billion
Exports: £20 billion
Over the past decade, there has been a 7% growth in apprenticeships, with 6,000 apprentices joining the workforce, reflecting a 14% increase. Productivity in the aerospace sector has surged by 25% over the last 10 years, with output per worker reaching £104,800, which is 39% higher than the UK average. The median salary in the aerospace sector is £49k, indicating the sector’s ability to deliver well-paid jobs.
Sustainability Initiatives
Sustainability remains a critical focus for the UK aerospace sector. The AGP’s Destination Net Zero Strategy and the 2022 Jet Zero Strategy outline the UK's ambitions to achieve net zero in aviation. New aircraft technology, lighter materials, reduction in contrails, and disruptive capabilities like hydrogen usage are pivotal in decarbonising the sector. The Aerospace Technology Institute (ATI) supports these efforts through the Hydrogen Capability Network, emphasising test infrastructure, research, and skills.
Sustainable Aviation Fuel (SAF) is another significant component of the sustainability agenda. The UK has committed to a SAF Mandate, requiring aircraft operators to use 10% SAF by 2030. Developing a domestic SAF industry is crucial for reducing net carbon emissions and creating job opportunities.
Regulatory Developments
As aerospace technologies evolve, maintaining an agile regulatory framework is essential. The introduction of Advanced Air Mobility (AAM), electric Vertical Take Off and Landing (eVTOL) vehicles, and Unmanned Aircraft Systems (UAS) marks significant advancements that must be integrated into the market. The UK Civil Aviation Authority (CAA) plays a pivotal role in acquiring greater independence and authority in rulemaking and certification, ensuring alignment with international bodies like the European Union Aviation Safety Agency (EASA) and the US Federal Aviation Administration (FAA).
Capacity Challenges
The aerospace sector faces several challenges, including supply chain shocks, workforce shortages, and the need for long-term capital investment. Strengthening supply chain resilience involves diversifying suppliers, investing in local manufacturing capabilities, and improving logistics and inventory management. Addressing workforce shortages is crucial, with initiatives to make aerospace careers more appealing.
Access to affordable and appropriate financing is essential for aerospace companies to scale operations, invest in new technologies, and expand manufacturing facilities. In 2022, private investment in aerospace amounted to £2.8 billion, underscoring the need for continued financial support.
Global Market Position
The UK remains a significant player in the global aerospace industry, accounting for 11.7% of UK exports of manufactured goods in 2023. The aerospace sector's export destinations are primarily non-EU countries (74%), with the remaining 26% directed to the EU. This export landscape highlights the sector's global reach and its dependency on international markets.
Conclusion
The UK aerospace sector is a success story, demonstrating resilience, innovation, and a commitment to sustainability. As the sector navigates regulatory and capacity challenges, it continues to drive economic growth and maintain its position as a global leader in aerospace technology.
With ongoing investment and a focus on sustainability, the UK aerospace industry is well-positioned to advance in the coming years.
