Wales Could Be Vulnerable to Changes in World of Aerospace; the Aerospace Sector Is Key to Improving the Competitiveness of the Welsh Economy. Here a Panel of Experts Explores Its Challenges and Opportunities SECTOR ANALYSIS AEROSPACE David Pickernell of the University of Glamorgan Assesses the Importance of the Aerospace Sector to the Welsh Economy
AEROSPACE is a key sector in Wales, comprising around 150 firms employing 20,000 people and contributing around pounds 2bn to the economy.
It is engaged in complex overlapping activities from aircraft manufacture (AM), through maintenance, repair and overhaul (MRO), to research, development and training (RDT). Accurate secondary data analysis is problematic, given that many firms with aerospace activities are often officially classified into other sectors, such as automotive or electronics.
The differences between pure manufacturing and MRO are also often blurred, with aerospace RDT difficult to disentangle from other supporting activities.
Nevertheless, given the capital-intensive nature of aerospace manufacturing, it has a relatively high average unit (ie firm) size. Aerospace also has relatively high levels of employee compensation, being significantly above the Welsh average for the economy as a whole.
The high value-adding nature of the sector is also highlighted by GVA per head figures which are well above the Welsh and UK averages for all industries. Input-output tables also reveal that the sector is very open in terms of (geographically) external trade linkages, which is to be expected given the nature of the products produced and the global nature of the market.
Simultaneously, however, all three sectors in Wales face particular challenges. This is because of greater external competition, particularly from developing countries, but also because of the changing nature of the aerospace product itself.
Recent trends, for example, include the increased use of composites in aircraft manufacture, which reduces the value of the strong metal-specific expertise inherent in Welsh aerospace manufacturing. Countries such as Spain and Japan have over recent years acquired such composite expertise, and the Welsh industry will need to continue to develop its expertise in this area over the coming years. …