Aerospace employment declined by 21,000 jobs in 1988 as the industry recorded its first annual sales drop in 17 years, according to the Aerospace Industries Association.

"The reason is a substantial decrease in sales to the Department of Defense, hardly a surprise in view of the zero-to-negative-growth defense budgets of the last four fiscal years," the association's president, Don Fuqua, said Wednesday.Overall sales volume was projected to reach $111 billion for 1988, a reduction of slightly more than $1 billion from last year.

"An analysis of orders on hand indicates a defense sales rebound in 1989, but we look for further substantial declines as we move into the early years of the 1990s," Fuqua said. The sales projection for next year is for $129 billion but "our real, inflation-adjusted sales curve for the next few years will be relatively flat," according to Fuqua.

Statistics released by the association said the number of jobs in the industry will drop to 1,307,000 for the year and that there will be 14,000 fewer jobs still in 1989.

Still, industry profits were expected to improve to $5.1 billion, and the backlog of unfilled orders to reach an all-time high of $170.3 billion, the association said.

An increase in civil aerospace business, Fuqua said, will offset the military decline.

"We must face this fact," Fuqua said at the joint AIA and Aviation-Space Writers Association luncheon. "The Bush administration and the new Congress must continue to accord top priority to further reduction in the national budget deficit.

"So, barring an unexpected change in the international climate, we must realistically anticipate lower levels of defense appropriations and therefore reduced industry sales of defense equipment."

Fuqua said American industry is severely handicapped in international competition by trade restrictions imposed by its own government.