Sector Friday time again, and this week is the turn of the Other Transport sector, a rather uninspiring name for a sector which has done so much to shape modern Britain.
The sector comprises the manufacture of aircraft, helicopters, satellites, ships, boats, hovercrafts, tanks, trains, bicycles, motorcycles, shopping carts and wheelchairs, among other things.
All of this makes it the second largest manufacturing sector in the UK and the one that has grown the most over the last twenty years. The subsector breakdown is shown below.
Britain had a large role to play in the development of this sector.
We invented the railways and spread our rolling stock engineering design principles across the globe, pioneered aircraft design with the world's first commercial jet airliner, supersonic commercial airliner and vertical take-off and landing combat aircraft. Alongside all this we even had time to build the first practical hovercraft in 1959 alongside our history of shipbuilding.
The dominance and importance of this sector to the UK economy hasn't ended. The UK aerospace sector is the 2nd largest in the world by revenue. We make helicopters for civil and military use and our supply chain produces almost every major part of a modern commercial aircraft.
Around 50% of what the sector produces is exported – largely driven by the aerospace component of the sector which consistently runs a strong trade surplus.
The sector employs over 146,000 people across 1,800 firms. The high R&D intensity of the sector explains how it grew and continues to thrive against fierce competition from developed and emerging markets. The sector is also characteristic for having long lead times in research and output production, allowing investment decisions to be taken over a longer time period.
The two main drivers of trends in the sector are globalisation and government (both foreign and domestic) procurement.
With airline passenger growth leading to an increase in aircraft production and government defence (and rolling stock) contracts dictating the other major parts of the sector.
The sector had a small dip in output during the recession and was one of only two sectors to grow in 2009 (at 5.2%). The 2013 US budget sequester had an impact on growth rates in the defence half of the sector, although positive signs on military orders at recent airshows demonstrates the ability for the sector to compete convincingly at a global level.
Looking to the future, growth looks positive with forecast passenger numbers in the Middle East and Asia-Pacific propelling aircraft orders. New domestic rolling stock orders could also see a small resurgence in that part of the sector as railway lines are electrified or built.
In addition the space sector is expected to grow significantly over the next two decades.