	Introduction

Like other manufacturing industries, the worldwide recession is weighing heavily on aerospace manufacturing. The aerospace industry's commercial side anticipates difficult business conditions for the near and medium term, but long-term projections by Boeing, for instance, are positive, with airlines expected to need 29,000 new planes valued at $3.2 trillion between 2009 and 2028. The international market for aerospace manufacturing is also rapidly changing, and it raises the question of what impact nascent competitors in countries such as China and Russia will possibly have on the future competitiveness of U.S. aircraft manufacturers. Aerospace Manufacturing Industry Overview

		Aerospace Manufacturing Workforce

As an industry, aerospace manufacturing in 2008 directly supported over 500,000 high-skilled and relatively well-paid private sector manufacturing jobs nationwide. The U.S. aircraft manufacturing industry is composed of major firms such as Boeing, United Technologies, Northrop Grumman, Gulfstream Aerospace, and Textron, among others. Established aerospace manufacturing centers are located in Washington state, California, Texas, Kansas, Connecticut, and Arizona (with a combined workforce of more than 305,000 in 2008, comprising over 60% of the aerospace workforce nationwide). Aerospace manufacturing clusters are also present in Florida, Georgia, Ohio, Missouri, and Alabama. Other states, such as South Carolina, are also seeking to increase their aircraft manufacturing production base. As of 2008, aerospace manufacturing by sales accounted for 1.4% of U.S. gross domestic product (GDP). Defense is the smaller of the two, and this segment depends on the U.S. government for a significant share of its sales. At the same time, the U.S. aircraft industry now depends on many non-U.S. firms for contributions to their own products. The unfair subsidization case, which dates back to a May 30, 2005, WTO filing by the United States, alleges that member states of the European Union (EU) provided Airbus with illegal subsidies from 1970 to 2004, thus giving the European aircraft manufacturer an unfair advantage in the large commercial aircraft market. Industry-wide exports (including defense and space products) by U.S. manufacturers of aerospace vehicles and equipment increased for five consecutive years, from $53 billion in 2003 to $97.4 billion in 2007. Japan, France, the United Kingdom, Canada, and Germany were the top five export markets for U.S. aerospace products in 2008, accounting for 36.2% of total aerospace exports worldwide. U.S. aerospace exports to China more than doubled between 2003 and 2008, growing from $2.7 billion to $5.5 billion. The U.S. aerospace industry trade balance stood at over $57 billion in 2008. The Regional Jet Market

Just like the large commercial aircraft market, the regional jet (RJ) market—typically considered to be commercial jet aircraft with up to 100 seats—depends on the recovery of the airline industry, and it is in a period of prolonged downturn. Canada's Bombardier and Brazil's Embraer are the two major manufacturers of these aircraft, and they now control the market. Regardless of the non-U.S. manufacture of these airframes, RJs represent an important market for the U.S. aerospace manufacturing sector, which provides these manufacturers with engines, landing gear, avionics, and a wide range of other components. Kansas is one state, in particular, that is directly affected by the downturn in the general aviation market. The large commercial jet aircraft manufacturing sector is a Boeing and Airbus duopoly. UAC has stated it plans to become the third-largest aircraft manufacturer worldwide by 2015. Public Policy Issues

Congress has been discussing broad issues affecting the competitiveness of the nation's aerospace manufacturing industry for most of this decade. In the early 2000s, the Presidential Commission on the Future of the U.S. Aerospace Industry released its recommendations on how to maintain the competitiveness of the aerospace sector. The response by some overseas competitors to U.S. export control policies has been to develop products that do not contain any U.S. components. Environmental Concerns

Like all other sectors of the U.S. economy, environmental concerns impact the aerospace industry.
Aircraft and automobile manufacturing are considered by many to be the technological backbones of the U.S. manufacturing base. As the Obama Administration and Congress debate how to strengthen American manufacturing, aerospace is likely to receive considerable attention. Like other manufacturing industries, the worldwide recession has affected aerospace manufacturing, with both the defense and commercial sides of the industry facing difficult business conditions for the near and medium term. This report primarily provides a snapshot of the U.S. commercial (non-defense, non-space) aerospace manufacturing industry and a discussion of major trends affecting the future of this industry.
The large commercial jet aviation market is a duopoly shared by the U.S. aircraft manufacturer Boeing and the European aircraft maker Airbus, with fierce competition between these two companies. The regional jet market is dominated by two non-U.S. headquartered manufacturers, Brazil's Embraer and Canada's Bombardier, both of which utilize a high level of U.S.-produced content in their products. The general aviation market includes companies such as Cessna and Gulfstream.
Aerospace manufacturing is an important part of the U.S. manufacturing base. It comprised 2.8% of the nation's manufacturing workforce in 2008 and employed over 500,000 Americans in high-skilled and high-wage jobs. More than half (61%) of the nation's aerospace industry jobs are located in six states: Washington state, California, Texas, Kansas, Connecticut, and Arizona. Several smaller aerospace manufacturing clusters are found in states such as Florida, Georgia, Ohio, Missouri, and Alabama. Other aerospace centers are beginning to emerge in southern states, such as South Carolina, where Boeing is now building a second production line to produce the 787 Dreamliner. Aerospace manufacturing contributes significantly to the U.S. economy, with total sales by aerospace manufacturers (including defense and space) comprising 1.4% of the U.S. gross domestic product in 2008.
U.S. aircraft manufacturers depend heavily on the international market for their sales. The aerospace industry sold more than $95 billion in aerospace vehicles and equipment (including defense and space) to overseas customers in markets such as Japan, France, Germany, and the United Kingdom, and imported over $37 billion in aerospace products from abroad, providing a significant positive contribution of $57.7 billion to the U.S. trade balance in 2008. Increasingly, other markets are becoming important as an opportunity to increase U.S. sales, but also because of the potential for future competitors to challenge the U.S. aerospace industry's competitive position. U.S. aerospace exports to China have increased since 2003, totaling $5.5 billion in 2008. At the same time, some analysts maintain that China could become a global competitor in the commercial aerospace market. Already, China is working to develop airplanes that could become globally competitive in both the regional jet and large commercial jet aviation market. Russia has stated that it wants to become the world's third-largest aircraft manufacturer by 2015.
Congress has been discussing issues affecting the competitiveness of the U.S. aerospace manufacturing industry for most of this decade. Among the concerns and issues affecting the future of the commercial sector of the industry are export control policies, environmental concerns, and an aging aerospace workforce. Additionally, the United States and the European Union are engaged in a long-running trade dispute over subsidies, with each side claiming the other subsidizes its domestic companies.