Aerospace Market Rebounding After Years of Impact from Shutdown

Aerospace Market Rebounding

The aerospace market is beginning to recover after being shut down due to the COVID-19 pandemic. While the industry is slowly regaining momentum, it is also facing challenges, especially in human resources and capacity.

The pandemic’s impact on the aerospace industry was particularly severe, with widespread consequences. Employment was significantly affected, with many machinists, essential to the industry, being laid off or having their hours significantly reduced. Given predictions of a two-to-four-year recovery period, many sought more stable employment in other sectors, such as construction.

Aerospace Industry Recovery

The industry’s recovery is driven by growth in the production of both narrow and wide-body aircraft segments, the approval of the 737 MAX to fly in China, and overall growth in commercial flights worldwide. OEMs have built on the previous year’s momentum, with commercial deliveries rising by 20% YoY in 2022, and an 11% YoY increase expected for 2023.

Airbus and Boeing’s robust financial results, with YoY commercial revenue growth of 15% and 33% respectively, have contributed to a global commercial aerospace revenue growth of 15% YoY in 2022. The aerospace industry is expected to maintain double-digit growth in 2023, reaching 14% YoY. (Source)

Despite these positive trends, workforce challenges remain, especially for sub-tier suppliers. Companies are implementing comprehensive talent strategies, such as supportive work environments, mental well-being programs, leadership training, technical degree opportunities, and flexible work arrangements, to attract and retain skilled employees. However, recruitment and retention challenges are likely to persist due to traditional business practices and generational changes.

Recent Statistics

Let’s consider some key statistics representing the Canadian aerospace industry over the past two years.

Between 2021 and 2022, the Canadian aerospace industry experienced positive growth in revenues, GDP, and jobs. In 2022 alone, the industry contributed nearly $27 billion to GDP and over 212,000 jobs to the Canadian economy. Although still below pre-pandemic levels, these figures signal the beginning of the industry’s recovery.

Additionally, in 2022, the Canadian aerospace industry maintained its #1 R&D ranking among all Canadian manufacturing industries, investing over $680 million in R&D. Despite a decline from 2021, this continues a trend in R&D investments since 2018.

The Canadian aerospace manufacturing industry also maintained its product range diversification, exporting approximately $18.7 billion and actively participating in global supply chains.

Challenges Ahead

1. Lack of skilled workers

The aerospace industry is confronted with a series of multifaceted challenges that are shaping its present and future trajectory. At the forefront of these challenges is the lack of skilled workers. Many companies that endured the pandemic now struggle to attract skilled workers for crucial roles. With many workers having left the industry for more stable jobs through the pandemic, and many more experienced members retiring from it, a talent shortage exists, hampering the ability to meet production demand.

2. Capacity constraints

The aerospace supply chain, consisting of several crucial tiers, is under strain. The third tier, build-to-print manufacturing, is one of Ben Machine’s specialties, while the fourth tier focuses on raw material processing, including manufacturing of raw materials, castings, and forgings. Both tiers face significant constraints, lacking adequate machines, skilled trades, casting facilities, or casting capacity to meet the aerospace industry’s mid-term requirements.

3. Digital transformation

In the face of an accelerating technological landscape and the emergence of high-tech startups, established aeronautics manufacturers must embrace innovation and modernization in order to remain competitive and meet the ongoing digital transformation of manufacturing. Investment in emerging technologies, including CNC machining, is crucial to the long-term viability of aeronautics firms. CNC machining, with its unparalleled precision and versatility, has become a cornerstone of aerospace manufacturing, enabling the efficient production of intricate components that meet the industry’s stringent quality standards.

4. Climate change

Another looming challenge is climate change, which poses both immediate and long-term risks to the aeronautics sector. As global temperatures rise, the efficiency and performance of aircraft are directly affected. Batteries are proving heavy and ill-suited to flight, requiring aeronautics companies to think outside the box and develop new technologies, like hydrogen propulsion, to move aircraft in a sustainable direction.

5. Economic Concerns

Potential economic difficulties and interest rate increases add to the industry’s challenges. While the full impact of these factors is uncertain, they will undoubtedly affect the industry. The cost of borrowing will hamper the ability of companies to add sophisticated CNC machines and production equipment, and the economic difficulties could quell demand.

Ben Machine And The Aerospace Industry

The aerospace industry’s recovery is a common theme in the current market landscape. However, to achieve the industry’s goals, the necessary resources must be available. Ben Machine is poised to support the industry in overcoming these challenges and achieving sustainable growth.