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Wednesday, January 9, 2013

Report: Global Aerospace and Defense Sectors to Go Opposite Ways in 2013

The global defense industry’s revenue is expected to decline as a result of cuts to military spending, while the commercial aerospace industry is expected to have record revenues in 2013, according to Deloitte’s 2013 Global Aerospace and Defense Outlook released Wednesday.

"The global defense industry should expect to see more aggressive competition for fewer large defense programs. Renewed foreign military sales efforts into new geographic markets that face increasing national security threats should offset part of the decline," said Tom Captain, vice chairman of Deloitte.

In contrast, the report says commercial aircraft manufacturers will achieve record revenue levels, driven by growth in passenger travel demand in Asia and the Middle East. Airlines will continue to show increased demand for more fuel-efficient aircraft such as the Boeing 737 MAX and Airbus A320neo in 2013 as well. Global production levels of commercial aircraft are expected to exceed 1,000 for the third consecutive year, according to the report.

Deloitte said 2013 should mirror the results of the third quarter of 2012, where declining revenues in the defense sector were offset by increased revenues in the commercial aircraft segment, resulting in slower growth for the entire global aerospace and defense industry. More

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