The global space industry’s annual revenue will cross $1 trillion by 2040, says a new report published by Citigroup analysts. Furthermore, the report suggested that the launch costs would decline as much as 95%, with reusable rockets being the prominent reason.
The industry’s major revenue source, especially in the satellite sector, is predicted to come from manufacturing, launch services and ground equipment. Notably, the satellite market makes up around 70% of the space economy.
“However, the fastest growth rate is expected to come from new space applications and industries, with revenue forecast to rise from zero to $101 billion over the period”, the analysis says as per CNBC. A 2020 report by Space Foundation revealed that the space industry is valued at $424 billion. Besides, a Morgan Stanley research in the same year reported $350 billion in revenue.
As for the growth in global annual revenue, it is also being accredited to a vast number of space companies that were established and went public in recent years.
Launch costs to plummet significantly: Citi
Notably, the cost of a rocket launch is based on the dollar-per-kilogram basis which according to Citi has lingered around $16,000 per kilogram for heavy payloads and $30,000 per kilogram for light payloads between 1970-2010. However, the estimates suggest that the current cost of around $1,500 will drop to as low as approximately $100 by 2040.
In addition to reusable rockets, the drop would also be accredited to factors such as a drop in material and operating costs. The report, however, underscored that the prices have already declined 40 times lower than the average cost per kilogram in the 1980s.
Notably, Citi credited Elon Musk’s SpaceX for pioneering the use of reusable rocket boosters with its first launch in 2010. Ever since, the company has managed to bring down the prices to $2,500, which is 30 times lower than NASA’s Space Shuttle-era cost.
Space economy predictions by other firms
Prior to Citi’s analysis, financial firms such as Morgan Stanley along with the Northern Sky Research (NSR) have their own timeline of the space sector crossing the $1 trillion mark. While Morgan Stanley’s forecast predicts the global revenue milestone by 2040, NSR has said that the $1 trillion mark will be crossed a decade earlier.
NSR’s report predicted that a cumulative revenue of $1.25 trillion is possible by 2030 owing to a 6.25% annual industry growth. According to NSR, the satellite market would again dominate the revenue generated in the space sector.