Scotland’s aerospace industry celebrates a record year of growth

3 June 2019

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Ask anyone in Scotland to name the country’s top performing industries and most will start with oil (until recently, at least) followed by whisky, tourism and fishing.

Some might mention niche sectors such as computer games and life sciences. It’s doubtful many would throw in aerospace, despite the industry setting a new annual record for aircraft deliveries, which has boosted our economy by £1.8billion in the past year.

How many people would know that around 80 aerospace companies now operate in Scotland, employing more than 7,600 people?

Orders and deliveries in December 2017, provided an end-of-year surge that broke industry records.

Across the UK, some 213 aircraft were delivered in that month alone, bringing the annual figure to 1,498 - more than 50 ahead of the previous record of 1,443 set in 2016. December also saw a record for aircraft orders in a single month, with 1,226 taken.

Scotland’s aerospace industry has seen seven years of consecutive growth as demand for new aircraft continues to rise.  Leading firms include Spirit Aerosystems, a US-owned company based at Prestwick, where they make wing components for Airbus.

Woodward Inc, also based in Prestwick, make pumps, valves, fuel nozzles, avionics for several aircraft including the Airbus A320 and Boeing 787.

In Dunfermline, Fife, Axon Cable manufacture cables for the Airbus and the Ariane 5 space rocket launcher, while Vector Aerospace in Perth specialises in repair, modification and testing of engine and hydraulic components.

In Dundee, WL Gore & Associates is a material tech company making products for commercial aircraft and space flight. 

Less encouraging is a new report which highlights the growing problem of late payment across Scotland’s entire engineering sector.

Supply chain SMEs are particularly badly affected by the issue which often makes it difficult for companies to order new equipment and pay staff wages.

A survey by the Specialist Engineering Contractors’ group Scotland (SEC Group Scotland) found that more than 60% of public bodies have extended their payment cycles, meaning contractors must wait longer to be paid. The figure for the private sector was 69%.

Only 28% of firms said they’d been paid by public bodies within 30 days (for the private sector the figure was 24%). Where firms were acting as sub-contractors on public sector works, over 85% reported that they were not being paid within 30 days (76% in the private sector).

Almost 47% of firms working for public bodies reported that a tenth of their payments were late (10% more than in the private sector). A significant number of firms (19%) reported that at least a third of their payments from public bodies were late.

Almost half of their payments are made late according to 45% of sub-contractors working in the public sector.

SEC Group Scotland has called on the Scottish Government to amend the Procurement Reform (Scotland) Act 2014 to require that all public bodies use project bank accounts (PBAs) so that payments to all suppliers are secure. Where PBAs do not apply, public bodies should have a statutory duty to ensure 30-day payments are made to all firms in the supply chain, it said.

The trade body wants to see legislation introduced to protect cash retentions and to create the role of a construction regulator. It also wants the cost of adjudication to be reduced so that SMEs can afford to challenge “spurious” reasons for withholding payments.

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