Why this is important to Wisconsin businesses: There are opportunities for Wisconsin firms in aircraft interiors and aerospace energy efficiency.
Germany’s economy remains on a steady path of growth, with an expected GDP growth of 2.2 percent in 2018. Underlying drivers of this positive dynamic are increased domestic demand and further expansion of foreign trade.
Due to increasing global demand for aircraft, transportation industry experts forecast between 30,000 and 35,000 new aircraft will be put into service in the next 20 years. Germany established its position as a global aerospace innovation hub and boasts a high concentration of aerospace-related manufacturing, research and development, design, recycling and supply-facilities companies. The sector records one of the country’s highest R&D spending levels, with €4 billion spent, which equals an R&D quota of 10 percent. Innovations facilitated in Germany include the Airbus A320 family, the Eurofighter and the European Ariane launcher. Currently, the German Aerospace Center (DLR) has a workforce of 8,000 employees in 39 institutes. In addition, Germany is home to equipment manufacturers, material and component suppliers, engine producers and system integrators.
Civil aviation continues to be the largest segment of the industry, with sales growth of 8 percent to revenue of €29.2 billion generated in 2017, followed by military aviation, with a sales increase of 3 percent to €3 billion. The industry is highly internationalized and counts an export share of 74 percent in 2017. Due to increasing global competition and the high priority of this sector for the German economy, the government subsidizes the further internationalization of the sector, which provides opportunities for Wisconsin firms. The industry is organized in associations and regional clusters such as the Bundesverband der Deutschen Luft- und Raumfahrtindustrie (BDLI), bavAIRia, Hamburg Aviation and Hessen Aviation.
In 2016, aircraft, aerospace and parts worth $40.6 million were exported to Germany from Wisconsin; that number increased to $49.1 million in 2017. In the first half of 2018, statistics measured exports of aircraft, aerospace and parts worth $37.7 million, which means that this category of exports from Wisconsin to Germany might even almost double by the end of the year compared to 2016.
There are opportunities for Wisconsin firms in aircraft interiors and aerospace energy-efficiency (e.g., lightweight construction and new material development sectors). Further sectors of interest for export activities are airport security, smart borders, telecommunications and critical infrastructure.
More information on the German aerospace sector can be found on the website of the federal association for aerospace in Germany, Bundesverband der Deutschen Luft- und Raumfahrtindustrie.
Trade fairs are the best way to get to know the local market and establish contacts with businesses. Airtec, taking place Oct. 23-25, the Aviation Forum, taking place Nov. 6-7, and the Aircraft Interiors Expo, taking place April 2-4 in Hamburg, are good opportunities for a sector overview and networking with potential business partners. In addition, Germany hosts the world’s largest trade show for aerospace, the ILA Berlin trade show, which takes place May 13-17, 2020, in Berlin.