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2014 Global Aerospace and Defense Industry Outlook

Expect another record year for commercial aerospace and continued declines in defense


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The global commercial aerospace sector is expected to sustain its significant revenue and earnings growth in 2014, underlined by extended record-setting production levels both at the platform and supplier base. This is expected to be driven primarily by the accelerated replacement cycle of obsolete aircraft with next generation fuel-efficient aircraft, as well as the continued increases in passenger travel demand, especially in the Middle East and the Asia Pacific regions.

On the other hand, continued declines in revenue and earnings are expected for the global defense sector. This is primarily due to the cessation of a prolonged period of armed conflict in Iraq and Afghanistan, leading to lower budgets for traditional purchasers of military equipment. However, with regional tensions continuing to simmer for example in the Middle East, North Korea, and the East and South China Seas, it is expected that affected governments will continue to increase purchases of next generation military equipment.

For the overall global aerospace and defense industry, revenue growth in the 5 percent range is expected for 2014. This would be similar to the growth experienced in 2012 and likely in 2013, all of it and more due to the rising fortunes of the commercial aerospace sector.

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