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Industry Insight Report: Aircraft Engine & Parts Mfrs Q2-2025
The aircraft engine and parts manufacturing industry continues to ride the momentum of a strong global travel rebound, but supply chain disruptions and production backlogs are putting a cap on how quickly manufacturers can scale to meet airline demand. As summer travel surges, major aircraft OEMs like Boeing and Airbus are falling short on deliveries, placing added pressure on suppliers to meet downstream demand.
Key Trends Impacting the Market
Backlogged Demand Driving Long-Term Opportunity
Airlines are eager to expand fleets amid high passenger demand, but Boeing and Airbus are struggling to hit production goals. Airbus delivered 56 aircraft in April, down 8% year-over-year, while Boeing improved its output to 45 jets, double March’s figure but still below annual targets. These shortfalls trickle down to engine and component manufacturers, extending timelines for parts orders and placing added importance on operational agility. The capacity crunch means engine and parts suppliers will likely see sustained demand into 2026 and beyond.
Employment Growth Reflects Industry Optimism
Employment in aircraft engine and parts manufacturing rose 3.6% year-over-year in April 2025, with a 19.1% increase over the past three years, outpacing the broader private sector’s 4.8% growth. This hiring trend signals confidence in the sector’s long-term outlook, despite current fulfillment challenges. While wage growth in aerospace has lagged the broader economy (10.3% vs. 13.4% over three years), average hourly pay still stands at a strong $47.74.
Forecast: Above-Average Growth Through 2029
Despite near-term hurdles, the long-term outlook remains positive. The industry is projected to grow at a 5.6% compound annual rate from 2025 to 2029, outpacing the overall economy. With continued investments in R&D and the next generation of propulsion systems, opportunities remain strong for both OEM-aligned suppliers and aftermarket parts manufacturers.
Outlook for Q3 2025
Expect sustained backlog pressure and extended lead times across the supply chain. Companies that can demonstrate reliability, quality, and scalable production will be in a strong position to win contracts. M&A activity in the aerospace supply chain may rise as private equity firms look to consolidate niche capabilities in high-demand sectors like engine components, avionics, and repair technologies.
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