Worldwide civil UAV production to soar $73.5 billion over the next decade
Civil Unmanned Aerial Vehicles (UAVs) promise to be the most dynamic growth sector of the world aerospace industry this decade, report Teal analysts in their latest market analysis.
“The civil UAV market is ready to take off,” said Philip Finnegan, Teal Group’s director of corporate analysis and author of the study. “Eased airspace regulations, a flood of outside investment, new UAS [unmanned aerial system] service offerings and the entry of leading technology companies are setting the stage for very rapid growth.”
Teal Group’s 2017 World Civil UAS Market Profile and Forecast forecasts that non-military UAS production will total $73.5 billion in the next decade, soaring from $2.8 billion worldwide in 2017 to $11.8 billion in 2026, a 15.5 % compound annual growth rate in constant dollars. Teal Group, an independent aerospace and defence research and analysis company, has provided support for the FAA in the preparation of its annual US civil forecast.
The Teal Group forecast in a recent study that worldwide military and civil UAS combined production will soar to $20.3 billion in 2025, up from $5.4 billion in 2016, and total $135 billion over the next 10 years.
Commercial use will be the fastest growing civil segment rising more than twelvefold from $512 million in 2017 to $6.5 billion. “The growing promise of the civil market is attracting the world’s leading technology companies, driving ever faster development of systems and business applications,” said Finnegan. Firms in traditional aerospace, data analysis, semiconductors, telecommunications are all driving aggressively into the market.
Technology companies and venture capitalists have poured $1.3 billion into the sector since 2013, according to the Teal Group study. In addition, there have been numerous acquisitions of UAS companies by Intel, Verizon, Facebook and Google. Other technology leaders such as Amazon and General Electric have focused on building up their own internal capabilities.
Construction will lead the commercial market. All 10 of the largest worldwide construction firms are deploying or experimenting with systems and will be able to quickly deploy fleets worldwide. The three largest construction equipment suppliers all have an agreement with a UAV manufacturer to provide everything from off the shelf systems to full end-to- end service.
Agriculture, which will adopt UAS more slowly, will still rank second worldwide over the next decade. The ability to do unmanned spraying of crops and provide imagery that can detect when and where to apply fertilizer, pesticides and water offers tremendous potential. While it grows more slowly than construction or communication, the agricultural UAS market has the potential to continue to grow considerably beyond the forecast period. Gradual adoption by sceptical farmers and improved technology will allow it to reach its full potential after the forecast.
Low-cost, high-altitude, long endurance UAS for internet promise to create an entirely new segment of the market. Airbus has already begun low rate production of solar-powered UAS and Facebook is also working on systems. The technology looks likely to be in place within several years to bring the internet to areas of the world with no service.
Other important segments, ranked in order by ten-year size, include energy, general photography such as real estate marketing, and insurance. There may be niche applications for delivery UAS during the forecast period such as deliveries of humanitarian supplies to remote developing areas. Yet regulatory restrictions and the uncertain economics of UAV delivery make it impossible to make a forecast for what could potentially be quite a large segment.
Civil Government and Consumer UAS Civil government UAS will be a much smaller segment than commercial, but the appeal is growing. The European Union’s creation of a new border and coast guard in an expansion of its existing Frontex prepares the way for the use of the unmanned systems. The European Maritime Safety Agency has just begun several new UAV services programs to patrol coastal waters, one of which is the largest civil government program in the world. The US Coast Guard is expanding its nascent use of UAVs. The United Nations is expanding the use of UAS in peacekeeping. UAVs also are catching on with law enforcement agencies worldwide, particularly in developing countries.
The consumer UAV segment will continue to grow but at slower rates than the past several years. The continuing increase will be based on easier to use systems with new capabilities. In addition to analysing the relative growth rates and dynamics of the market segments, the study examines investment trends by venture capital firms, and examines the strategies companies are using to address the market.
Consumer UAV manufacturers are moving into commercial markets by offering more capable systems to move up the value chain. Defense companies are working to develop smaller, cheaper systems for civil government and commercial use as well as provide end-to-end solutions that involve data collection using UAS and data analysis. Start-ups are seeking to provide everything from data analysis to full service UAS packages.