The aerospace sector, one of the largest and most powerful industries in the United States, supplies five markets: military aircraft, missiles, space, commercial airliners and general aviation. The U.S. aerospace sector is considered the largest in the world and is the main supplier of both military and civil aerospace hardware to the rest of the world. This sector directly employs about 500,000 workers in scientific and technical jobs, and supports more than 700,000 jobs in related fields. Because of the great emphasis on research and development, about 25% of those who work in aerospace are engineers, scientists and technicians. Aviation is one of the fastest-growing industries in the United States, and it has increased yearly at the rate of at least 14%.

The aerospace industry's product line is broad because its primary products, flight vehicles, require up to millions of individual parts. In addition, many support systems are needed to operate and maintain the vehicles. In terms of sales, military aircraft have the largest market share, followed by space systems, civil aircraft and missiles. According to a recent study by the U.S. Department of Commerce, aerospace exports directly and indirectly support more jobs than the export of any other commodity. In 2012, the U.S. aerospace industry contributed $118.5 billion in export sales to the U.S. economy.

In 1958, the National Aeronautics and Space Administration succeeded the National Advisory Committee for Aeronautics and initiated the Mercury manned space program. In 1959, the U.S. Aircraft Industries Association, which was formed in 1919 to promote American civil aviation, changed its name to the Aerospace Industries Association. U.S. aerospace industry interests are represented through the AIA, an aerospace-industry-funded organization that provides a forum for technical and policy issues, and whose membership consists of the major companies in the field. In 2000, America's largest aerospace companies, ranked in terms of total revenue, were Boeing, Lockheed Martin, United Technologies, Honeywell, Raytheon and Textron. Among the leading companies in the American corporate aircraft market are Raytheon, Cessna and Gulfstream, which is part of General Dynamics.

The aerospace sector's origin in the United States dates back to December 1903, when Wilbur and Orville Wright demonstrated an airplane capable of powered, sustained flight. In 1908 the Wrights secured a contract from the U.S. Army to make a single aircraft, and also licensed their patents to allow the Astra Company to manufacture aircraft in France. Glenn Curtiss of New York began selling his own aircraft in 1909, prompting many American aircraft hobbyists to turn entrepreneurial.

Air and space travel have become entrenched in daily life. Federal programs and recent or pending legislation are in place to ensure the future of the aerospace industry in the United States. This legislation includes the 2010 National Space Policy, which is intended to give U.S. commercial space companies the opportunity to provide new services to the government such as cargo transportation to the International Space Station as well as human transport for exploration.

  1. What are common risks associated with investing in the aerospace sector?

    Learn more about the aerospace industry and some of the many risks aerospace and defense companies face. Find out more about ... Read Answer >>
  2. What are the best mutual funds for investing in the aerospace sector?

    Discover mutual funds and some other possible investments that can be utilized by investors seeking exposure to the aerospace ... Read Answer >>
  3. What other sectors are most highly correlated with the aerospace sector?

    Learn about the aerospace industry and two closely related industries that share many of the same characteristics. Discover ... Read Answer >>
  4. How can I invest in the corporate bond market without a lot of money to invest?

    Discover the factors that drive share prices in the aerospace sector. This sector is defensive due to companies' balance ... Read Answer >>
  5. What are the most popular ETFs that track the aerospace sector?

    Learn more about the risks involved with investing in the aerospace and defense industry. Find out more about popular exchange-traded ... Read Answer >>
  6. What metrics are most appropriate to evaluate companies in the aerospace sector?

    See which fundamental metrics, such as advanced product bookings, are most important to evaluate before investing in the ... Read Answer >>
Related Articles
  1. Insights

    Top 7 Aerospace Companies in the World (BA, UTX)

    Find out which aerospace companies rank as the largest in the world based on annual revenue in 2015 from defense and non-defense business.
  2. Investing

    Is the Future Bright in Aerospace? (BA, UTX, RTN)

    Global aerospace products and services market revenues have declined recently, but a rebound may be ahead.
  3. Investing

    The Aerospace Industry Supercycle Is Losing Altitude (BA, GE)

    Sluggish economic growth, low oil prices, dollar strength and higher interest rate together suggest the aerospace supercycle may be ending.
  4. Investing

    B/E Aerospace: An Activist Investment Analysis (BEAV)

    Find out how activist investment fund Relational Investors forced B/E Aerospace to split up, only to pull out after founder Ralph Whitworth was diagnosed with cancer.
  5. Investing

    Top 3 Defense ETFs (PPA, XAR)

    Defense ETFs are likely to due well regardless of who wins the presidential election.
  6. Trading

    How to Trade the Uptrend in Aerospace and Defense

    Nearby support on the charts of these aerospace and defense stocks suggests that now could be the ideal time to buy.
  7. Insights

    Who Are Northrop Grumman's Main Competitors? (NOC)

    Learn about the financial and operating profiles of the three main competitors to Northrop Grumman in the aerospace and defense sector.
  8. Trading

    Traders Turn To Aerospace and Defense Stocks

    Recent news from Lockheed Martin and United Technologies has put the Aerospace & Defense sector on trader's radar. We'll take a look at how to trade the news.
  9. Investing

    Time to Innovate With Industrial ETFs

    Investors are returning to a popular industrial ETF, and there are reasons to believe that more upside is ahead.
  10. Investing

    A United Technologies Product: Always Closeby

    If you flown in an airplane, shopped for food or sat comfortably in a hot climate, you've probably used a United Technologies product.
  1. Industrial Goods Sector

    A category of stocks that relate to producing goods used in construction ...
  2. Aviation Accident Insurance

    Insurance that provides coverage for injuries resulting from ...
  3. United States Aircraft Insurance Group - USAIG

    The nation's first aviation insurance company, founded in 1928 ...
  4. Phil Condit

    A former CEO and chairman of Boeing. Condit is best known for ...
  5. Service Sector

    The portion of the economy that produces intangible goods. According ...
  6. Nicholas D. Chabraja

    A former CEO and chairman of defense contractor General Dynamics. ...
Hot Definitions
  1. Short Covering

    Short covering is buying back borrowed securities in order to close an open short position.
  2. Covariance

    A measure of the degree to which returns on two risky assets move in tandem. A positive covariance means that asset returns ...
  3. Liquid Asset

    An asset that can be converted into cash quickly and with minimal impact to the price received. Liquid assets are generally ...
  4. Nostro Account

    A bank account held in a foreign country by a domestic bank, denominated in the currency of that country. Nostro accounts ...
  5. Retirement Planning

    Retirement planning is the process of determining retirement income goals and the actions and decisions necessary to achieve ...
  6. Drawdown

    The peak-to-trough decline during a specific record period of an investment, fund or commodity. A drawdown is usually quoted ...
Trading Center