Business-jet sales dropped for a third year in 2017 as a commodities bust dried up orders of large aircraft from oil-rich customers.

Sales fell to US$18 billion last year, down 4 percent from 2016, marking the lowest level since 2012, the General Aviation Manufacturers Association said in a statement. Shipments of large aircraft, from companies including Bombardier Inc. and General Dynamics Corp.'s Gulfstream unit, fell 2.8 percent to 176.

The decline is no surprise for an industry that has been signaling that new jet models this year would power a turnaround. Gulfstream will begin deliveries of the new G500 and G600 this year and Bombardier plans to start shipping the Global 7000, the industry's largest plane, at the end of the year.

Large-Jet Lag

Energy and mining companies pulled back on buying aircraft that can fly between continents after commodities fell and crude prices plummeted from more than US$100 a barrel in 2014 to below US$30 in 2016. Many owners sought to unload their aircraft to cut costs, driving down prices of used jets.

It's a different story this year. Commodities have rebounded, with crude oil now above US$60 a barrel. The U.S. economy is accelerating, driving corporate profit growth in a market that's home to about two-thirds of the world's business jets. U.S. companies are flush with cash after Congress cut the corporate tax rate to 21 percent from 35 percent and provided a break on bringing back cash held abroad.

Stabilizing Future

"We're optimistic, given some very positive economic indicators, stabilization in the used business aircraft market," Pete Bunce, chief executive officer of the aviation manufacturers' trade group, said in the statement.

General Dynamics saw orders for its largest planes pick up in the fourth quarter, said Chief Financial Officer Jason Aiken in a presentation Wednesday at a Barclays conference. That could increase if corporate tax cuts boost economic growth, he said.

The tax law also accelerates the depreciation customers can claim on their jets, a savings that could be another spur for demand this year, he said.

"We feel very good about the level of activity we see," Aiken said. "That robust, healthy pipeline continues for both the G650 as well as the new models."

Overall jet deliveries last year rose by 9 units to 676. The increase was driven by small jets, which saw shipments jump to 135 from 92. That impact on sales is also small. The Embraer SA Phenom 100, which has a cramped ceiling just under 5-feet tall and usually carries four passengers, has a list price of US$4.5 million compared with US$69.4 million for a Gulfstream G650ER. The G650ER can carry up to 19 people from New York to Tokyo.

The shipments of 176 large aircraft last year was the lowest amount since 2007. Deliveries of midsize aircraft fell to 365 from 394 in 2016.