The aerospace industry constitutes a declining fraction of gross national product. Indeed, 1968 was the peak year for aerospace sales—even in current dollars. The number of primarily aerospace companies has declined from 20 in the early 1950’s to seven today. On the other hand, the last three decades have revealed a fairly well defined 10-year cycle in the aerospace industry; if the oil crisis has caused a two- or three- year delay in the current cycle, 1977 and the years beyond could be good ones for the industry.

This article examines the prospects for military and space programs, contractor by contractor and program by program. It reviews the history of military sales since World War II and shows how the sales and profits of individual companies have fluctuated over that period. In addition to providing composite industry balance sheets for 1955, 1965 and 1976, it computes conventional measures of financial health and explores their meanings, taking into account both the special features of the aerospace business and the peculiarities of aerospace accounting.