UPDATE 1-U.S. aerospace sees continued sales growth in 2011

* Industry has posted record sales every year since 2004

* Industry group sees warplane sales slowing (Adds further forecast figures, quotes, background)

By Jim Wolf

WASHINGTON, Dec 15 (Reuters) - The U.S. aerospace industry is headed for continued sales growth in 2011, but warplanes are likely to play a smaller role than in recent years due to possible Pentagon cutbacks, the industry's main trade and lobbying group said on Wednesday.

Overall sales are expected to hit a new high of $216.5 billion this year, a record for the seventh straight year, rising to nearly $220 billion next year, the Aerospace Industries Association said in its annual year-end review.

The industry has had year-over-year growth since 2004, and this year will mark the ninth year of sales expansion in the last 10. In 2009, total U.S. aerospace sales were $214.5 billion.

Among the biggest U.S. aerospace companies are top Pentagon suppliers including Lockheed Martin Corp (LMT.N), Boeing Co (BA.N), Northrop Grumman Corp (NOC.N), General Dynamics Corp (GD.N), BAE Systems Plc (BAES.L), Raytheon Co (RTN.N) and Harris Corp (HRS.N).

Commercial aircraft sales slipped this year, but were more than offset by military aircraft sales, which continued a boom that has seen them nearly double since 2000.

The industry's civil aerospace category includes commercial, business and general aviation aircraft as well as non-military helicopters, aircraft engines and related parts.

Civil sales dipped nearly six percent in 2010 to $48.2 billion. A rebound is expected in 2011, but will hinge on such things as the state of the economy, jet fuel prices, aircraft financing availability and environmental regulations, the trade group said.

Military aircraft sales totaled an estimated $64.5 billion this year, up eight percent from 2009. It was the 10th year in a row of such increases, "but this breakneck pace is likely to ease considerably in the coming years" amid efforts to slash the $1.3 trillion federal deficit that may include Pentagon budget cuts, the association said.

In October, the Obama administration told Congress of plans to sell as much as $60 billion in arms to Saudi Arabia with deliveries likely to stretch over a decade. Included are Boeing F-15 fighter jets, UH-60 Black Hawk helicopters made by United Technologies Corp's (UTX.N) Sikorsky unit and Boeing AH-64 Apache helicopters.

"However, challenges are on the horizon," the group's summary document said, with the federal budget crunch likely to "constrain adequacy of aircraft funding."

The industry recorded $195.7 billion in orders in 2010, up 16.4 percent from 2009 and "a welcome change after two years of decline," the group said. Civil aircraft and parts orders jumped to an estimated $84.9 billion, up 65 percent from the year before.

Rising imports and falling exports led to a five percent drop in the industry's trade balance, but the surplus of $53.3 billion is still the strongest of any manufacturing industry, Marion Blakey, the group's president and chief executive, told a luncheon held to present the forecast and review.

She said it would be dangerous to cut U.S. military spending, set to total more than $700 billion in the current fiscal year, as deeply as some deficit reduction hawks have urged.

"The United States' security relies on maintaining our defense technological advantage," Blakey said. (Reporting by Jim Wolf; Editing by Tim Dobbyn)