Homeland Defense to Spur Aerospace IT Spending

The aerospace industry will see strong growth in information technologies and solutions needed to bolster homeland defense, a top industry official said Dec. 12.

"There clearly will be solid expansion in the industry ... that will have to do with IT in ways to identify people and track things," said John Douglass, president and chief executive officer of the Aerospace Industries Association. Douglass was speaking at the AIA's annual year-end review and forecast in Washington.

Although the events of Sept. 11 are sparking an upsurge in IT spending related to homeland security, those same events will cause a sharp contraction in overall industry sales, especially in commercial aircraft production, he said. The aerospace industry expects to see a $6.6 billion decline to $144.4 billion in 2002.

But Douglass expressed optimism that the industry would rebound quickly, rather than continue the decline. For example, the industry reported profits of an estimated $8.7 billion in 2001, up from $7.3 billion in 2000, he said.

In addition, sales for military equipment is expected to increase next year by $5.1 billion to $54 billion, which will partially offset the reduction in commercial production, he said.

Exports are expected to remain strong, as the events of Sept. 11 have not dampened the foreign demand for U.S. aerospace products and services, Douglass said.

The Washington-based AIA represents the top aerospace companies in the United States, including Boeing Co., General Dynamics Corp., Lockheed Martin Corp., Raytheon Co. and TRW Inc.