Aerospace Manufacturing Space Demands Surge With Federal Spending, Industry Innovation

Manufacturing in the U.S. pivoted in 2025, with a wave of expansions by aerospace and defense companies replacing clean energy projects that were paused or canceled as federal funding priorities changed.

Aerospace and defense made up 49% of the 53,000 job announcements representing $42B in capital investment last year, according to Savills' 2025 manufacturing report, up from less than 30% one year ago. 

The industry’s growth is predicated on finding the right real estate, according to Natilus CEO Aleksey Matyushev, whose San Diego-based company is designing new commercial and cargo jets and is set to begin searching for a full-scale manufacturing site.

“We need some of the biggest buildings in the entire world,” he said.

The company will first open a 250K SF site to build cargo planes and then eventually open a 2.5M SF facility for 200-passenger commercial jets. 

Demand for new aircraft is surging as the public’s uses expand beyond passenger jets to include drones and vertical take-off and landing vehicles. The aerospace industry is also developing new technologies such as blended-wing aircraft meant to improve safety and fuel efficiency.

The Aerospace Industries Association is tracking a 100% jump in civil aircraft demand as the sector benefits from increased global travel and rising defense spending, including $150B authorized by the One Big Beautiful Bill Act last summer. The International Air Transport Association found the global shortfall of vehicles at 17,000 jets, equivalent to 12 years of current production.

“A lot of funding is going into the defense side of things, in light of the geopolitical world we’re in, and on the commercial side, the legacy aircraft haven’t changed much in decades,” Savills Vice Chairman Taylor Wood said. “It seems ripe for investment and disruption.

Aging fleets and deep production backlogs at major manufacturers are also creating openings for new entrants to the industry, Savills’ industrial research lead Mark Russo said. 

All this growth means significant spending on manufacturing sites, a prize fought over by local economic development teams, many of which are trading on legacy federal investment in aerospace and new federal funding to develop centers for research and manufacturing. 

While California, Washington, and Texas have long received the most investment and industry revenue, the aerospace industry in states like North Carolina and Ohio continues to grow.

Last June, Long Beach, California-based JetZero, which is developing a new kind of blended-wing commercial aircraft, announced it would invest $4.7B in a new 3M SF manufacturing site at the Piedmont Triad Airport in North Carolina, predicted to create 14,500 jobs. 

The state promised nearly half a billion dollars in infrastructure investments on the future site, with more incentives tied to future job numbers and other economic metrics. That airport already includes the manufacturing site for Boom, a new supersonic aircraft startup. 

As of last fall, more than 1,000 acres of airport-adjacent land in North Carolina’s Triad area was under development, according to Area Development magazine.

This surge for new aviation solutions comes just as the reshoring push from the Trump administration gets boosted by the depreciation allowance in the Big Beautiful Bill, encouraging more development of U.S. manufacturing sites by aerospace firms around the globe, Wood said.

Last June, French aerospace firm Aura Aero announced a new hangar and factory for electric jets coming to Daytona Beach, Florida, and Brazilian firm Embrear announced a new $70M aircraft maintenance facility and manufacturing plant in North Texas in October.

These types of projects take many years to come to fruition, due to the complexity of facility construction, uncertainty around new technologies, and the numerous federal agencies and regulations that come into play for planes and flying vehicles, especially if there’s a defense component involved. 

“In some ways, the startups have the advantage that they don’t have customers, so they're able to just take an idea and then go do it,” Wood said. “Where the legacy businesses have a longer lead time to get to productivity.”

But the payoff can be massive, including a large influx of good-paying engineer and manufacturing jobs, as well as demand for suppliers, which helps push warehouse development and commercial and residential development for a new workforce. 

“These plants are like cities in themselves, creating their own economies,” Russo said. 

Ohio has seen recent success attracting a number of new aerospace and defense companies, including Joby, which acquired a new 700K SF manufacturing site in Dayton in January, and Anduril, which decided to locate the new $1B Arsenal-1 facility near Columbus. 

The efforts to attract these companies have been years in the making, according to JobsOhio, the state’s private economic development corporation.

The state’s manufacturing base, a surfeit of air strips and underutilized airports and job incentives have helped attract new companies and developments. Many longtime auto parts firms are adjusting their production lines to provide parts for these new aerospace firms. 

And the new activity has spurred on additional real estate development. In Dayton, the onMain Innovation District broke ground on the Think Dayton building in September.

The project is the first of many commercial buildings coming to the former 38-acre Montgomery County Fairgrounds site. The project has gotten a boost from new aerospace developments nearby.

In addition, Sierra Nevada Corp. — aerospace, not beer — is building four new 9K SF airplane hangars adjacent to Dayton’s airport.

And outside the nearby Wright-Patterson Air Force Base, an initiative is underway to develop a plot of 43 acres of underutilized land to create a $250M office park and innovation hub for aerospace-related businesses.

Industrial real estate demand in Dayton has surged due to new defense and aerospace development.

"Up until six or seven years ago, it was very difficult to have airports viewed as economic development engines, and I think now that is playing out differently,” Dayton Development Commission President and CEO Jeff Hoagland said.

Russo predicts that investment in aerospace will continue at the same pace or faster this year and in 2027, as defense spending stays elevated and venture capital continues to flow into the sector.  

According to recent PitchBook reports, the $1T U.S. defense budget, Europe’s rearmament push, and a drive to fund autonomous drones and defense tech means aerospace and defense’s “healthy spending environment is likely to persist for the foreseeable future.” 

There were $10B in deals for airplane parts companies through the first three quarters of 2025, according to PitchBook, which would outpace elevated spending in 2024 and 2023 of $12B and $7B, respectively.

The true challenge of site selection for these projects isn’t just finding land, power and incentives, it’s finding employees to keep up with all the work, Matyushev said.

“The thing that's really like keeping me up at night isn’t power or water, it’s the  job pool,” he said. “Where do you get 11,000 technicians that can build a plane? That’s like a decent-sized university, but every one of your classmates knows how to build airplanes.”