Civil aviation: strong demand, but supply chain concerns

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Just under a month a go I blogged about our forecasts for growth in manufacturing sectors in the year ahead. At the time I pointed out that Other Transport – which includes civil aviation – was likely to be one of the strongest performing sectors this year.

Civil aviation has benefited from strong demand from the Middle East in particular, and an article in today's FT points out that there are sizeable orders backlogs which should keep production growing for some time to come.

However, the article goes on to mention concerns about the strength of supply chains in the sector, though this is a broader issue affecting several manufacturing sectors. Many suppliers were badly hit by the previous recession, and some have since struggled to ramp up production in response to stronger demand. There is also renewed caution related to the ongoing crisis in the Eurozone.

The government's Advanced Manufacturing Supply Chain Initiative (AMSCI) is taking steps to help build supply chains and last week Vince Cable announced £90mn worth of funding for 32 manufacturers to help build domestic supply chains.

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