Global Space Industry Revenue Soared 18 Percent To $220 Billion Last Year
Space Agencies Worldwide See Budgets Up, Except In Japan
The worldwide space industry saw blistering 18 percent growth to a total $220 billion revenues last year, compared to 2005, the Space Foundation disclosed in releasing its Space Report 2007.
"Space businesses are on the rise around the globe, providing solid returns for investors," said Elliott G. Pulham, foundation president and CEO.
Nearly every sector of the space industry experienced growth in 2006, according to the report. Satellite-based products and services and U.S. government space investments comprise the two largest segments of the space industry at 50 percent and 28 percent of total revenues, respectively.
Revenues for 2005 were revised upward to $186.31 billion from the estimate of $179.65 billion that was provided in the report last year.
Another measure of the space industry performance also showed a hefty advance.
Since its inception in June 2005, the Space Foundation Index has increased by more than 45 percent, significantly outpacing both the NASDAQ and S&P 500 indices, which grew 31 percent and 28 percent, respectively.
The 2007 report updates the 2006 version.
The report expands the traditional three-sector model — civil, commercial, and national security space — into a more precise and comprehensive nine-sector model based on the end use of space products, systems and services.
The Space Foundation Index, now in its third year, is weighted to track the market performance of 31 public companies that derive a significant portion of their revenue from space-related assets and activities.
To review the report in its entirety, go to http://www.spacefoundation.org on the Web. The 2008 report will be released in April, providing data for 2007.
Some 101 satellites were injected into orbit last year, according to Pulham, who spoke with journalists in a telephone briefing.
One emergent sector in the space industry, commercial space transport, includes space tourism. Virgin Galactic, it was said, is taking $11 million-apiece deposits from wealthy individuals wishing to fly to space.
Pulham predicted that costs of space travel will continue to trend down steadily.
The report provided details on many different segments of the space industry.
Worldwide government spending on space programs in 2006 increased or remained constant for nearly every major space agency, with the Japanese Aerospace and Exploration Agency (JAXA) as the notable exception, according to the report. Space programs worldwide totaled $74.5 billion last year, up 7 percent increase from 2005.
Of that, U.S. government space spending, which makes up more than 80 percent of global government space budgets, grew 8 percent to $62 billion in 2006.
That includes both the U.S. Department of Defense and the National Aeronautics and Space Administration (NASA), which are the two largest space agencies in the world, with budgets of $22.5 billion and $16.6 billion, respectively, for the fiscal year ending Sept. 30, 2006.
A portion of the 8 percent growth in U.S. space spending can be attributed to a 30 percent increase in budget estimates for the National Reconnaissance Office (NRO) and the National Geospatial-Intelligence Agency (NGA), according to the report, citing estimates provided by Global Security. Other U.S. government spending has remained relatively consistent, with modest growth in all civil and military agencies’ space spending, the report continued.
International government space budgets held steady as a whole, with moderate growth in Europe, Russia, and Asia offsetting reductions to the Japanese space program.
Overall, international government funding increased by approximately 1 percent to $12.46 billion last year. Non-U.S. space budgets represent about 5 percent of global space economic activity.
The European Space Agency (ESA) is the largest international space agency with a budget of $3.5 billion, followed by the French, Japanese, and Chinese agencies.
The French space agency, Centre Nationale d’Etudes Spatiales (CNES), had a budget of approximately $850 million last year, excluding ESA contributions.
This is a nominal decrease from the $880 million CNES budget in 2005, but is an increase in real terms considering the change in value of the Euro from 2005 to 2006.
For the period of 2005-2010, France intends to commit approximately $5 billion to space programs, and the budget is projected to continue to grow under increased attention from the French government, the report predicted.
The Japan Aerospace Exploration Agency (JAXA) was the only major international space agency to reduce spending last year, the report found, and it suffered devastating funding cuts.
In a hefty reduction, the Japanese space budget was cut significantly last year to about $1.5 billion from $2.5 billion a year earlier. That’s a roughly a 40 percent plunge.
The reduction is attributed to changing priorities within the government after more than a decade of economic stagnation. Keiji Tachikawa, currently the head of JAXA, has stated the cuts are pushing the program to near collapse. The JAXA budget has been cut each year since 2003.
With one nation, however, the Space Foundation had difficulty determining just what is happening.
Although the Chinese space budget is not published, the vice administrator of the China National Space Administration, Luo Ge, stated in 2005 that the Chinese space budget was around $500 million. There is much speculation as to how much money the Chinese government is spending on space; secrecy, purchasing power parity, and overlap between military and civil spending complicate estimating efforts, the foundation noted.
The Chinese space budget is generally estimated between $1.5 billion and $2 billion, with some media estimating as high as $3 billion.
About a year ago, Sun Laiyan, administrator of the China National Space Administration, stated that the Chinese space budget was less than one-tenth of the NASA budget.
Using all these data as a basis, the foundation estimated Chinese spending on space programs at $1.5 billion. Indian, Russian, and European governments continue to increase space spending, according to the report.
Expenditures include improved infrastructure, particularly global positioning, navigation and Earth observation systems, and launch capacity. Non-U.S. military estimates are based on 2004 data and include the United Kingdom, France, Russia, Germany, Belgium, Spain, Italy, and Israel.