As manufacturing continues to gain steam across North America, M&A activity in the aviation industry space is expected to remain strong as larger companies look to gain capabilities and accelerate growth. In addition, mega deals in the cyber security space remain a topic of conversation as the aforementioned Raytheon acquisition of Websense and Bain Capital’s acquisition of Blue Coat Systems foretell the importance of staving off cybercrime.
According to data from rom the Interindustry Economic Research Fund (IERF), revenue for US aerospace manufacturing is forecast to grow at an annual compounded rate of 5 percent between 2015 and 2019.
Aerospace has been a major factor behind increased manufacturing activity in the United States. The global aerospace industry is increasingly opting to situate manufacturing operations in the US instead of low-cost rivals such as China and Mexico, according to new data from ICF International reported by Reuters. Between 2000 and 2012, aerospace manufacturing investments were strongest in China, Mexico, India, and Brazil. Since 2012, more investment has been returning to the US amid rising wages in the developing world. Robotic automation has helped manufacturers in developed countries become more competitive with low-cost producers. Boeing has moved more production in-house as it has reduced outsourcing of work on its 787 Dreamliner. Airbus’s decision to build a plant in Mobile, Alabama, is also attracting aerospace supplier investment to the region.
Aircraft makers based in China and Japan are taking on longtime incumbents Embraer and Bombardier in the regional jet market. Mitsubishi Aircraft expects to begin test flights of a 76 to 88-seat regional jet in the second quarter of 2015, with deliveries beginning in 2017. The company has set the goal of attaining 50 percent of the global market for regional jets over the next 20 years, according to The Wall Street Journal.
Posted by Joe Contaldo.