Deloitte predicts 2012 commercial aircraft growth


A Deloitte report indicates production will rise for the commercial aircraft industry in 2012.
A Deloitte report indicates production will rise for the commercial aircraft industry in 2012.

The commercial aircraft sector will experience rising production in 2012 due to an increase in demand for travel, according to a report released by Deloitte Touche Tohmatsu Limited's (DTTL) Global Manufacturing Industry group on March 2. This expanding activity could translate to staffing in the industry.

Rising demand for both business and leisure travel should support healthy growth in the commercial aircraft sector, and the Asia Pacific region should make a strong contribution to the industry. The report indicates that that the sector will be supported by the creation of aircraft programs aimed at generating fuel-efficient airplanes, as well as sustained production of commercial vehicles.

"The commercial aircraft sector has taken an innovative approach to responding to increasing fuel costs," Tom Captain, Global Aerospace and Defense sector leader, DTTL, said in a statement. "The development of fuel-efficient aircrafts that utilize next-generation engine technology has resulted in a significant rise in aircraft orders. However, certain suppliers will be challenged to keep pace with the expected increase in production rates and new program introductions this year."

The study also predicted that the defense industry could experience dropping profit margins as a result of falling budget expenditures on the military, especially in the United States and Europe. The Deloitte report warned that the industry might need to engage in cost-cutting measures, including process improvement in its operations and selling off certain assets.

However, various regions in the United States indicated evidence that the defense sector is healthy. The Rhode Island defense industry will create 600 new jobs in 2012, according to a report that was prepared for Southeastern New England Defense Industry Alliance Defense Industry Partnership.

The Skills Gap Study polled more than 200 defense-related firms and the results were presented at a February 28 event that happened at Quonset Development Corp. Governor Lincoln D. Chafee as well as Director of the Department of Labor and Training Charles Fogarty both attended the event.

The study, prepared by Ninigret Partners of Rhode Island, evaluated the skills existing in the state's defense workers and identified four crucial areas where talent was lacking. Business administration, engineering, production and technicians were four places that faced a shortage of needed talent.

"The defense industry is very important to our state and I commend the work of the Defense Industry Partnership to identify areas where we can make improvements to our state’s workforce to increase jobs and contract capabilities. We are committed to addressing the issues outlined in this important study by working together to close the skills gap," Governor Chafee stated, according to Providence Business News.

North Carolina is another state that has produced evidence of strong defense activity, with the North Carolina Military Business Center (NCMBC) providing data indicating that the region's expenditure on the sector increased by 13 percent in 2011, according to The News & Observer. Governor Bev Perdue made an announcement with the NCMBC that $4 billion in federal contracts went to the state in 2011.

Firms in 87 out of 100 of the counties in the southern state were involved in defense contracts in 2011, the news source reports. Of the counties that were engaged in this activity, 22 got more than $20 million of these agreements. Onslow County received $1.2 billion in federal contracts during the period, exceeding all other counties in the state.

North Carolina defense staffing has been supported by the regional firms' production of items including helmet cameras for canines, body armor designed for U.S. troops, parts used in weapons and parachutes, according to the media outlet.