New Hampshire has seen dramatic success in recent years in the aerospace and defense industries. The expansion and co-location of Albany Engineered Composites and Safran USA to Rochester are just two high-profile examples of the manufacturing renaissance happening right now in the Granite State.

To learn more about the opportunities within this high-tech industry, we spoke with Dawn Wivell, consortium manager for the New Hampshire Aerospace and Defense Export Consortium. As Dawn notes, “NHADEC is the ‘go-to’ organization for the A&D sector. We have a very close relationship with the Congressional Delegation, whose various staff members attend every meeting.”

What does the aerospace market look like for New Hampshire businesses in 2015? Where are the opportunities?

The overall global aerospace and defense industry is expected to grow in the 3 percent range in 2015, similar to growth in 2014. Much of the growth is in the commercial aerospace sector, which is expected to sustain its significant revenue and earnings growth in 2015, underlined by extended record-setting production levels. This growth is likely to be driven primarily by increased production rates attributed to the accelerated replacement cycle of obsolete aircraft with next generation fuel-efficient aircraft.

Growth is also attributed to the continued increases in passenger travel demand, especially in the Middle East and the Asia-Pacific region. This increase in production rates by major aircraft makers will place intense pressure on every part of the supply chain, ultimately affecting delivery schedules and costs. OEMs and suppliers will need to conduct analyses of their supply chain capabilities to assess risks and to identify and address weak links.
And the defense market? How does that look by comparison?

In the global defense sector, continued declines in revenues are expected. The United States defense budget is a key driver of this decline. Despite calls for increases in defense spending, sales revenues lag outlays, appropriations and budget authorizations. Budget cuts and the suspension of the armed conflict in Iraq and Afghanistan have been key factors over the last three years.

Regional tensions in the Middle East, North Korea, and the East and South China Seas are considered as potentially leading to increased defense budgets, but that is still uncertain. The United Arab Emirates, Saudi Arabia, India, South Korea, Japan, China, Russia and other affected governments have and are expected to continue to increase purchases of next generation military equipment. The F-35 (Joint Strike Fighter) will remain one of the few large weapons platforms achieving meaningful growth.

Other areas that are fairly safe bets include cybersecurity, intelligence, surveillance, and reconnaissance. Defense suppliers should consider migrating their business models toward commercial applications to offset defense spending declines.
What does NHADEC do for NH exporters above and beyond what the OIC and US Commercial Service offer?

The ITRC and the USEAC are intensely involved with NHADEC, bringing resources and programs directly to the organization. Tina Kasim, program manager for the OIC, is a member of the NHADEC board and the OIC, along with the USEAC, are involved at every level of our operation.

That said, NHADEC offers many additional benefits to members, including but not limited to:

• Individual company profiles on the NHADEC member portal and on the NHADEC website
• Quarterly newsletter
• Member meetings every alternate month
• Additional export consulting and expertise
• Links to local, national, and international institutions and special NHADEC partners worldwide
• Bespoke training activities, assistance with compliance and regulatory issues
• Common information system
• Industry and supply chain access
• Collective participation in exhibitions and trade shows, domestic and international
• Trade missions abroad, private and public
• Participation in incoming buyers’ missions
• Collective hosting of potential clients
• Bespoke market research
• Identification of distributors and clients
• Negotiation of preferential agreements with service providers
• Joint bidding on projects, domestic and international
• Invaluable tribal knowledge and networking with and leveraging of statewide and regional players

NHADEC also provides an opportunity to service providers, who have a viable service to provide the core membership, to become members and network directly with said core members.
What’s happening with our neighbors to the north, in terms of New Hampshire companies doing business with Quebec aerospace and defense companies?

The focus seems to be somewhat more in the aerospace sector in terms of Canada at present. Canada has the world’s fifth largest aerospace market. In 2011, Canada generated roughly $22 billion in revenues, over 80 percent of which were from Quebec and Ontario. Canada is home to large OEMS such as Bombardier, Pratt & Whitney Canada, Rolls Royce Canada, Bell Helicopter Textron Canada, Boeing Canada, CAE and L-3. Approximately 83 percent of the industry is in civil aircraft manufacturing, while 17 percent is in military aircraft manufacturing.

Over 80 percent of production is exported; over 50 percent of imports are from the United States. Sub-sector best prospects are:

• Civil and military aircraft, and aircraft parts
• Aircraft engines and engine parts
• Avionics and instrumentation
• Aircraft maintenance, repair and overhaul
• Air defense and combat technology
• Air surveillance systems
• Simulation software Opportunities
• Bombardier Platforms: CSeries, Challenger 7000/8000, Learjet 85 (over $4 billion)
• Bell Helicopter Textron Platforms: Bell 427 and Bell 429 Helicopters
• Boeing Platforms: Dreamliner 787, Chinook (over $1 billion)
• LM F-35 in Canada: approximately $9 billion in contracts over the next 20 years

What’s next for NHADEC and its member businesses?

NHADEC membership continues to grow every month. Our first quarterly newsletter will be coming out shortly. Some of the upcoming events are:

• Hosting the aerospace and defense specialist from the U.S. Commercial Service in Malaysia in March, who will be conducting one-on-one meetings and facility tours of our members;
• Hosting the defense attache’ from the British Embassy at an upcoming meeting;
• NHADEC’s first event in June 2015, with member exhibits, and attendees from the OEMs and key players throughout the region;
• NHADEC members participating in the Dubai Airshow in the fall, which is being coordinated by the state;
• Participating in a trade show to a prime export location for defense, and safety and security.