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Deloitte 2013 Aerospace and Defence outlook

10 January 2013

  • Defence sector to shrink
  • Commercial aircraft production to set new records

According to the 2013 Global aerospace and defence outlook launched by Deloitte this week, the global defence industry’s revenue will likely continue to slide as a result of cuts in military spending, while the commercial aircraft industry will likely have record revenues in the coming year.

“The global defence industry should expect to see more aggressive competition for fewer large defence 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 and U.S. and Global Aerospace and Defence (A&D) leader, Deloitte LLP.

However, in contrast to cuts in defence spending, the commercial aerospace sector is expected to reach record levels of revenue in 2013 as a result of increased production rates and the introduction of next generation aircraft. “In the commercial aircraft sector, expect to see 2013 continue with the trend of global production levels above 1,000 aircraft per year for the third year in a row,” continued Captain.

The overall combined revenues for the A&D industry are expected to increase modestly in 2013 given large increases in global revenues for commercial aerospace, coupled with declines in defence spending. The balance of defence and commercial production activity should provide the diversification the A&D industry may need to continue to thrive and grow next year.

Pauline Biddle, UK aerospace and defence sector leader at Deloitte, says: “We are expecting defence contractors to continue focusing on cost cutting and we are likely to see increasing levels of mergers and acquisitions and further market growth over the next few months. Focus will remain on cyber-security, intelligence, surveillance and reconnaissance technologies. Continued innovations that are the hallmark of this industry should power the next generation of technology development that can contribute to safer, more fuel efficient aircraft.”   

A copy of the report is available to download.

Ends

About Deloitte’s Aerospace & Defence Group
Deloitte's A&D sector focuses on top issues facing the industry. Deloitte A&D practitioners have deep industry experience and are actively involved in various segments of the industry, including: M&A, advanced technology programs, airplane program launches, and acquisition reform and economic assistance packages. For more information about Deloitte’s A&D group, please visit: www.deloitte.com/us/a&d.

About Deloitte:
In this press release references to Deloitte are references to Deloitte LLP, one of the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited

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