Cebr Analysis of Post-Covid Recovery of the Aerospace Sector

The Prospects Service within Cebr, one of the UK’s leading economics consultancies, have compiled for ADS by Cebr presents a selection of forecasts for output in terms of gross value added of the UK aerospace sector until 2025, a post-Covid recovery.  

In recent months the impact of the pandemic on public health and the economy has been worse than many anticipated at the start of the crisis. With travel restrictions tightening again and further quarantine requirements on the horizon, aviation and aerospace sectors have been feeling the ongoing pain of the pandemic more so than other sectors.  

The forecasts start from a baseline which is a central UK recovery scenario, where potential future UK GDP growth is impacted by a recent surge in coronavirus cases in Q4 2020 as well as new imposed restrictions in Q1 2021. In this baseline, the UK economy is expected to exceed pre-pandemic levels of output from early 2022. However, we know the aerospace recovery will be different. 

The ADS policy and economics team have worked with Cebr economists to advise on some of the impacts our members are currently reporting. Similarly, we have looked at potential influences both negative and positive on the sector recovery over the short term, for example, a worsening of pandemic and ongoing travel restrictions or the continued positive roll out of the vaccine. 

ADS have made available the full report from Cebr on our members site which is free for members to access.  The report looks at three different recovery scenarios:  

Scenario 1: Aerospace to maintain a constant share of manufacturing output 

Under this scenario, activity for the sector needs to return as soon as Q2 2020 and Cebr projects aerospace recovery to return to pre-pandemic output by Q1 2023. 

 Scenario 2: Faster recovery 

A faster recovery sees intervention taking place to allow for aerospace manufacturing recovery to start as soon as possible, under this scenario, Cebr projects aerospace recovery to return to pre-pandemic output by Q3 2022.  

 Scenario 3: Subdued recovery 

The subdued recovery forecasts activity returning for the aerospace sector around Q3 2021, but not returning to pre-pandemic levels until beyond 2025. 

 ADS believes the sector will find itself somewhere between the subdued and constant share of manufacturing scenarios given current circumstances. We note that with well-timed government interventions the sector could bring the recovery closer to a constant share of manufacturing than we currently envisage, and without it the outlook for the aerospace sector for 2021 will continue to lag behind other manufacturing sectors