A softening of purchase expectations in several regions led Honeywell Aerospace to scale back its 10-year forecast for new aircraft deliveries, but the increasing preference for large-cabin, long-range aircraft is keeping the anticipated dollar value of those deliveries at the same level as previous forecasts.

In its latest Business Aviation Outlook, Honeywell predicts a market for 9,250 new business jets valued at $250 billion through 2023. The forecast is down from last year’s prediction of 10,000 new business jets through 2022. Honeywell, which surveys more than 1,500 business jet operators along with original equipment manufacturers to develop its annual outlook, found operators plan to replace 28% of their fleets over the next five years.

This is down by 2% from last year’s survey, but still up from pre-2006 averages of about 25%. Honeywell’s forecast sees an average of 4%-5% annual growth, although that likely won’t begin until next year. Honeywell believes deliveries will be down again this year, coming in at between 600-625 business jets. This is a decline from the 672 business jet deliveries that the General Aviation Manufacturers Association reported for 2012.

But Honeywell says this dip is more due to program delays than a decline in demand. This is true for a number of programs. Cessna’s new Citation X has been pushed into 2014, while the Learjet 70/75 series was not expected until this quarter. The Learjet 85 and Embraer Legacy 500 had already been delayed until 2014, while other programs may be slowed by the recently ended government shutdown that lasted more than two weeks.

Rob Wilson, president, Honeywell Business and General Aviation, says the market is still “spotty,” depending on the region, but that it is showing all the classic signs of the early rebound stages. Honeywell is more optimistic for 2014, with a number of new aircraft slated to head to market. More operators are also indicating plans to take delivery sooner than they had in previous surveys, giving Honeywell more confidence that modest growth may return next year.

The preference for large cabins continues to grow, pushing up the overall value of the business aviation market over the next 10 years. When asked what were the most important factors in purchase decisions, operators ranked range at the top of the list, followed by cabin size, Wilson says. Honeywell found that 55% of new purchase plans are for large-cabin aircraft. The large-cabin group will also represent 80% of the value of new business jets, the forecast predicts. “The trend toward larger cabin aircraft with ever-increasing range expectations and advanced avionics is seen more strongly than ever in this year’s survey,” Wilson says.

But at the same time, he says midsize aircraft will also be a growing segment and may actually eclipse large-cabin deliveries based on a compound annual growth rate. Purchase expectations are pointing to a shift back to the North American market, which accounts for 61% of projected demand. Demand from North America was up eight points from last year’s survey, the first time in recent history that demand has grown from North America, Honeywell says. Wilson calls the potential improvement in the North America market welcome news and says it should help spur momentum as other regions soften their anticipated growth rates.

Operators in the so-called BRIC countries – Brazil, Russia, India and China – have lowered their purchase expectations from 46% of their existing fleets to 42% this year, but still rank among the strongest markets for demand. China remains a strong market, Wilson says, but anticipated demand from the Asia-Pacific Region overall dropped from 34% of the fleet last year to 24% this year. Honeywell believes this is a short-term decline that could stem in part from “moderations of past exuberance and economic tempering affecting the region’s major economies.” Honeywell notes that forecasts predict a strong recovery in the region next year. Wilson also cautions that a smaller pool of operators can skew the numbers with small changes.

Purchase expectations also dropped for operators based in Europe, the Middle East and Africa, while remaining stable in Latin America. Like the BRIC countries, purchase plans in Latin America are well above the world average of 39% that plan to make a purchase. Of those purchase plans, 52% are anticipated in the next three years – again far more “front-loaded” than the world average. The stability in Latin America and jump in North America bodes well for the midsize and light-jet markets that have struggled over the past five years.

Honeywell sees development work across all platform sizes, in both announced and unannounced projects, Wilson says. He sees flight and fuel efficiency, along with evolving next-generation air traffic management technologies such as ADS-B, serving as drivers in upcoming projects.

The fractional market has not played a significant role in new deliveries in recent years, accounting for only 20 new jets this year. But a number of major orders have boosted the industry’s backlog, and Honeywell believes these deliveries should begin picking up in 2014. But it is unclear whether future fractional deliveries will be replacements or represent a fleet expansion.

Flight activity has been improving for both fractional and charter operations, but overall remains flat. North America has shown signs of slight increases, but Wilson notes this stems primarily from international arrivals and departures.