US space industry is urged to prepare for a recession

Experts in the US space industry, including from such large companies as the United Launch Alliance and Virgin Orbit, are talking about an impending recession. In their opinion, not all companies will survive it, and much will depend on the government.

US space industry in anticipation of a recession

United Launch Alliance CEO Tori Bruno warns that the US space industry needs to prepare for a recession. Unpleasant forebodings have been haunting businessmen since winter. And the financial statements of companies for the first quarter of this year showed the reality of the threat. The main problems are external, but they can overlap with unpleasant purely internal issues.

According to Bruno, the main problem that private space will face in the coming months is the growth of interest rates. This means that every financial failure will be more painful. And investors will start investing almost exclusively in proven companies.

The past success of startups was largely based on the fact that venture capitalists invested in everything that sounds exciting. And thanks to this, many truly innovative ideas have been given the opportunity to be implemented. But now those times are over.

Despite this, Bruno says that the US space industry is well. And even if several companies have to die, the overall potential should not suffer much. In the end, not only too bold projects will leave the market, but also companies with questionable business models.

At the same time, it should be noted that the United Launch Alliance can confidently look to the future. By the end of this year, a new Vulcan Centaur carrier will begin flying into space, for which orders from the US government are already ready. And the contract with Amazon gives self-confidence.

Future role of the US Government

Virgin Orbit CEO Dan Hart agrees that the US space industry is entering a recession. But about the possible mass extinction of too bold startups, he is not as optimistic as Bruno.

According to him, the market is now full of innovative ideas. And the US government should be interested in them. The recession is, first of all, an opportunity to support the most interesting of them.

Of course, there is a deadly abyss between a great idea and new launch vehicles and satellites, in which huge funds can sink. But it is government organizations, according to Hart, that should become the force that will help overcome it.

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