The annual survey by the Society of British Aerospace Companies (SBAC) has reported strong results in the UK aerospace and defence sector for 2007.
Orders were up by 65 per cent to a record £43.8bn, while sales increased by only 1.01 per cent to £19.84bn. The industry has seen a significant rise in research and development investment from below £2.5bn in 2006 to £2.92bn in 2007.
According to the report, growth has been stifled by exchange-rate fluctuations between sterling, in which the UK companies report figures, and the dollar, in which the market operates. Overall, the industry contributed £628m to the UK balance of trade in 2007.
SBAC’s chief executive, Ian Godden, said the aerospace and defence sector would be in a strong position to weather the financial crisis if fuel costs, interest rates and commodity prices fall quickly.
Godden said: ‘Despite the strong performance last year and the positive indications from order books for the future, the UK-based industry finds itself at a crossroads. The financial crisis will undoubtedly hit our sector despite the full order books of our members but, providing liquidity is maintained in the sector, it should play a major role in the recovery of the UK economy.’
SBAC claims that government backing is needed if the industry is to retain its leading position.
Godden added: ‘Instead of viewing defence projects as simply that, the government could look at them as another excellent investment for taxpayers’ money during the current downturn. Not only would this approach deliver jobs in the UK and skills for future projects but it would also enable us to gain a significant return on our investment through exports.’