Defense and aerospace sectors face cybersecurity mandates and labor shortages

The defense and aerospace industrial base faces significant operational shifts due to upcoming regulatory deadlines and labor constraints. On November 10, 2026, Phase 2 of the Cybersecurity Maturity Model Certification (CMMC 2.0) rollout will take effect. This requires third-party Level 2 certification against 110 NIST SP 800-171 controls for Department of Defense contracts involving Controlled Unclassified Information. With an estimated 350,000 suppliers, analysts suggest tens of thousands of firms may exit the market if compliance costs become prohibitive.

Simultaneously, the sector is grappling with a skilled labor shortage. While commercial aviation demand grows, manufacturers are facing a shrinking pool of tradespeople, particularly in surface preparation and finishing roles. To mitigate these shortages and production backlogs, companies are increasingly looking toward autonomous systems and physical AI to automate manual tasks like sanding and coating. Projections indicate a need for up to 3.8 million workers in the manufacturing sector between 2024 and 2033.