Industry Forecast


with initial capabilities projected to be fielded in the mid-2020s.


Missile Programs The FY 2020 budget funds the continued Air Force and Navy procurement of both the AIM-120D Advanced Medium Range Air-to-Air Missile (AMRAAM) and the AIM-9X Block II Sidewinder short-range air-to-air missile. Both programs are in Full-Rate Production and are integral to the preservation of air superiority for U.S. Armed Forces in future combat operations.


Modernization Programs The Navy, Marine Corps, and Air Force are investing in modernization programs that improve the capability and extend the utility of existing aircraft. Adding advanced Infra-Red Search and Track (IRST) sensors will significantly improve detection and targeting of threat aircraft despite complex enemy Electronic Attack, while


the development and


fielding of an Active Electronically Scanned Array radar will enable the F-16 aircraft to maintain relevance throughout their service life. The FY 2020 budget funds the modernization of the existing bomber fleet of B-52s, B-1s and the B-2s. Major modification efforts on the B-2 aircraft include weapons upgrades as well as replacements for the B-52’s inefficient and aging engines.


Aerospace and Defense Summary In spite of the grounding of the Boeing 737-8 MAX and the termination of the A380 program, 2019 deliveries of castings serving this sector were largely unaffected, and the growth trend continued, resulting in 4.4% growth over 2018 netting $4.1 billion in casting sales for Commercial Aerospace and Defense combined.


Industrial Gas Turbine


New installations of Industrial Gas Turbines continue to show further slide with 2019 estimated at 385 new units. This represents a 9.9% decline from


14 ❘ January 2020 ®


2018. The CAGR for new installations for the three year period ending in 2019 is -6.74%. Much of this decline is attributable to growth in solar and wind farm installations.


When it comes to casting sales there are other factors that we need to consider beyond new installations. Currently there are approximately 35,000 industrial gas turbines operating worldwide. GE account for approximately half of the installed base, followed by Siemens at about a fifth and Mitsubishi Hitachi Power Systems at about a sixth. As a result, the spares market for IGT components is strong and growing. Another factor to consider is OEM Casting sales fell over the


inventories.


past two years after an extended buildup of components, most notably at GE and Siemens. To address


inventory issue,


procurement of these components went soft over the past two years, and at this time, OEMs have all but depleted stockpiles of components.


Currently,


procurement trends have picked up, but cautiously so as to ensure OEM inventory levels do not get out of hand. Considering all factors, we are


finally seeing some light at the end of the tunnel with growth anticipated in 4th quarter 2019. This is compounded by a strong aftermarket and new programs on the


horizon. In 2019, IGT sales are expected to regain some ground,


finishing at approximately $760 Million, an 8% increase over 2018. 2020 North American IGT sales are expected to continue to grow at a similar rate, finishing the year at $900 million.


Automotive Over the past several years, the automotive industry has enjoyed steady growth, resulting from a robust economy, low fuel prices, widespread credit availability and dealer incentives. This year’s US Automobile sales approached the 17.1 million units achieved in 2018, but fell short with 17,047,640 passenger cars and light trucks being sold.


This


represents a 1.3% decline from the same period last year. As we have seen over


the Sports Utility Vehicles past


several years, consumers continue to favor


(SUVs)


and light trucks over conventional passenger vehicles, resulting in further declines in the percentage of sedans and coupes sold. At year end, 10.0% fewer passenger cars were sold when compared 2018. Conversely, there were 2.7% more SUVs and light trucks sold in 2019. When comparing the two years, 32% of the vehicles sold in 2018 were conventional passenger cars, while this year that percentage has fallen to 29%. ICI Members participating in


the Automotive sector confirm that their sales are tracking closely to the aforementioned trends, with 2019


North America


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