Confronted by economic uncertainty and a vexing glut of good used aircraft, the market for new business jets remains largely stalled.

Still, the largest, most capable and most expensive of the offerings are finding buyers, and there are faint signs that others may follow.

The collapse of the general economy and the world's financial markets in late 2008 presaged an end to what had been boom years for business jet makers. Quite suddenly, buyers disappeared and customers began deferring deliveries. The party was over.

Then came a wave of order cancellations that decimated the manufacturers' multibillion-dollar sales backlogs, which they had believed would cushion them against any eventual market recession. And, indeed, those orders would have been a significant buffer in a normal cyclical downturn.

But this downturn was unprecedented in its speed, severity and reach. Consequently, manufacturers slashed production rates and payrolls, with several postponing or killing aircraft development programs and planned facility expansion.

Fast-forward to 2012. The business aviation market seems to be slowly, almost haltingly, recovering. Business aircraft utilization is up slightly over the past two years, and the used market is stabilizing, more or less. However, new aircraft sales remain sluggish, especially for small and mid-size business jets. Unit deliveries should be somewhat higher in 2012 than in 2011, but real improvement will have to wait until 2013.

Overall, the fundamentals of the market are sound. Considerable latent demand exists; with continued economic improvement, the market should grow aggressively. Corporate profits, a key leading indicator of business jet demand, are robust. But companies are holding back from making major capital expenditures, including purchases of business aircraft.

The main reason for the hesitancy among potential buyers seems to be uncertainty—about the general economy, the political environment, and the level of taxes and regulations that business aircraft operators may face. And some U.S. politicians have vilified business aviation users, contributing to negative public perception of the segment and chilling existing and would-be operators.

Nevertheless, large-cabin and long-range business jets have been selling throughout the downturn and into the nascent recovery. These models are generally bought by wealthy individuals and big corporations, who are better insulated from economic downturns than the typical buyers of smaller jets. In addition, demand for the smaller models tends to be heavily concentrated in the U.S.—where market saturation and economic sluggishness prevail—while larger-capacity jets have more global appeal.

In a sharp departure from the past, customers outside the U.S. now account for 45-50% of business jet sales and for some manufacturers, non-U.S. buyers account for much more than that. International demand will fuel the recovery in the next few years.

But the U.S. will remain the largest market for business jets for the foreseeable future. Annual production will not return to pre-2008 levels until the U.S. market joins the recovery in full.

Fractional ownership programs have been responsible for much of the growth in the business jet market over the past decade or more. But in a slow market those programs are forced to concentrate on the operational side of their business by reducing operating costs and right-sizing aircraft fleets. The good news for business jet manufacturers is that in late 2010 and early in 2011 order activity picked up from the fractionals.

New models have historically spurred market activity, and several OEMs are obliging. Gulfstream is introducing the ultra-long-range G650 and super-midsize G280. The company is also studying a possible replacement for the G450, and will have to decided what to do with the G550, should the larger G650 claim much of that model's market.

Not willing to cede the top of the market to its Savannah, Ga.-based rival, Bombardier launched the Global 7000 and Global 8000 in the fall of 2010. The new Globals will feature larger cabins and longer ranges than the G650, but are slated to enter service four to five years later. Meanwhile, Bombardier is continuing development of the all-composite Learjet 85 for the medium segment of the market.

Dassault is engaged in a total refurbishment of its product line, replacing its Falcon 2000EX and Falcon 900EX with longer-range LX versions. It recently introduced the Falcon 2000S (a variant of the 2000LX) in the super-midsize class. An all-new super-midsize Falcon is also on the way.

Cessna just launched the Citation M2 light jet and Citation Latitude medium jet. The latter model in particular is emblematic of Cessna's traditional strategy of filling every subniche in its markets, and fits between the XLS+ and Sovereign in its product line.

Embraer is expanding its executive jet lineup to seven with the introduction of the Legacy 450 and Legacy 500. In its long-term planning, the Brazilian company also has an eye on the long-range segment, where it currently does not compete.

Hawker Beechcraft is taking steps to revise its cost structure, rationalize its supply chain and improve profitability. It is investing heavily in customer support as well as upgrade packages for existing aircraft. The latter include the Hawker 400XPr and Hawker 800XPr upgrades, which have new engines, winglets, and optional avionics and interior upgrades.

Development of Honda Aircraft's twin-engine HondaJet continues, although the program has been hampered by vendor problems and more recently by ice ingestion issues with its GE/Honda HF120 engine, forcing a fan redesign. The aircraft, Honda's first, will compete with other light jets including the Embraer Phenom 100 and new Cessna M2.

And with financial backing from Sikorsky, Eclipse Aerospace plans to begin production of an upgraded version of the Eclipse 500 twinjet, dubbed the Eclipse 550.

However, further underscoring the continuing weakness at the light end of the market, in December 2011 Hawker Beechcraft announced it was slowing development of its smallest jet, the Hawker 200, a decision that followed by two months Piper's halting of all work on the single-engine Altaire, which was to be its first jet.

Meanwhile, at the extreme opposite end of the business jet market are executive-configured versions of airliners from Airbus, Boeing, Bombardier and Embraer. In October, SuperJet International, a joint venture of Sukhoi and Alenia, announced it was entering this rarefied club with the launch of the Sukhoi Business Jet, a variant of the Superjet 100 regional airliner. At the same time, VIP charter operator Comlux signed for two aircraft, plus two options, with delivery scheduled for 2014.