WASHINGTON — U.S. aerospace and defense exports growth has slowed after its robust 60-percent increase from 2010 to 2015, according to a recent report by consultancy firm Deloitte.

The A&D exports contributed to 10 percent of all U.S exports in 2016, an increase from 7 percent in 2010, and its growth has benefited the U.S. export versus import trade balance.

"As a net exporter, the sector reduced the U.S. trade deficit by $85.5 billion and was the top contributor to the U.S. trade balance amongst some of the major sectors," according to the report.

Since 2015, U.S. A&D growth slipped from 4 percent to 1.7 percent, due to several environmental factors including global competition, the growing strength of the U.S. dollar and limitations in place on the U.S. Export-Import Bank, specifically, its 75 percent decrease in financing since 2014.

"While American-manufactured A&D products remain attractive to foreign customers, US exports are more costly in the international market. Global competitors increased proficiency in manufacturing A&D products; and competitive currencies and lower labor cost will continue to press US A&D export growth in the coming years," said Robin Lineberger, a principal at Deloitte Consulting LLP.

Photo Credit: Deloitte analysis based on data from United States Census Bureau

U.S. commercial aerospace exports continued to grow at a stable rate in 2016, with only a small growth deceleration, which the report attributes to a constant rise in global travel.

Meanwhile, defense exports and U.S. foreign military sales still occupy a significant portion of U.S. A&D exports. On average from 2014 through 2016, defense exports and FMS accounted for 35 percent of U.S. A&D exports. However, the $13 billion drop in FMS contributed to the overall tabling of growth.

U.S. FMS exports surged in 2011 and 2012 due to record-level weapons purchases from Saudi Arabia, the United Arab Emirates and Oman, particularly of the F-15 fighter jet purchases by Saudi Arabia.

Following the three-year growth period, U.S. FMS took a 28 percent dip in 2016; however, the report predicts 2017 to be a growth year.

Photo Credit: Deloitte analysis based on data from United States Census Bureau

"In 2017, US fighter manufacturers are likely to sell approximately $36 billion only in military aircraft, with recent announcements including the sale of F-16s to Bahrain, F-15s to Qatar and F/A-18s to Kuwait. Foreign military sales by the US are expected to remain robust for 2017 and 2018, driven by increases in defense spending globally, especially in the Asia Pacific and the Middle East regions," the report said.

The report also found a marginal decrease in employment in U.S. A&D exports despite the yearly growth. Deloitte attributes this to a combination of the deceleration of growth and efficiency initiatives through automation. It estimated the direct and indirect job loss to total 344,610 personnel over the past five years.

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