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Holding steady

2010 midyear outlook for the global aerospace and defense sector


Holding steadyDespite the downward pressure on defense spending and relatively slow sales in the commercial aircraft and business jet segments, the global aerospace and defense (A&D) industry has continued to show resilience in 2010, according to a new study released today by the Deloitte Global Manufacturing Industry Group. Holding steady: 2010 Midyear outlook for the global aerospace and defense sector, examines the quarterly financial statements released thus far in calendar year 2010 by 25 top global A&D companies.

Sales revenue growth was -1.01%. Operating profit growth was -1.92% and operating margin growth was -0.92%, all pointing to flat financial performance for the first quarter of 2010.

According to the outlook, defense spending, which is led by the United States (U.S.) Department of Defense, is decreasing, with a 5% drop in research and development spend expected into fiscal year 2011, and a base budget increase of only 1.8% that barely keeps pace with inflation. The United Kingdom (UK) is expected to have a steeper decline in defense spending. However, the study also states that defense expenditure in India is expected to increase to US$32 billion and spending in the Gulf Coast countries is expected to rise dramatically.

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