Global Aerospace and Defence Industry is one of the top industries in the world that generate a significant amount of revenue every year. As per Global Aerospace and Defence Industry reports, it is worth $170 billion. The global aerospace and defence industry is to grow at 3.0 percent, according to aerospace and defence market research. This positive signal follows years of deterioration in revenue growth in past few years. The industry involves the manufacture of defence goods, including information systems used in watercraft, aircraft and weaponry. It is a highly concentrated market that sells mainly to governments who require products for military purposes or spacecraft for federal space programs.
Over past couple of decades, the increase in international conflicts and the campaign against terrorism has inspired new warfare technologies. As a result of that the Aerospace & Defence market has witnessed a radical growth across the world. With the advancement of technology, the dynamics of defence are changed. Now they are not bounded by the borders as the war exceeds them. Primary driving force behind Aerospace and defence manufacturing demand is the possibility of international warfare, national military budgets and airline traffic. Credible technical expertise and wise pricing of long-term contracts are two of the main success factors for companies in the industry. Companies remain competitive by collaborating with partners and keeping costs down. Aerospace and defence manufacturing companies must collaborate with governments to remain compliant regarding regulations.
The Aerospace & Defence (A&D) industry is comprised of manufacturers from civil and military aerospace and defence procurements. The worldwide revenue of the A&D industry was recorded to be US$771 billion in 2010 and registered year-on-year growth of 4.8% from US$744 billion in 2009. Defence occupied the largest share of the spending pie with 71.8% at US$660.8 billion in 2009.
Key Market Segments:
Aerospace and Defence companies will continue to face the challenges of improving productivity and responding to ever increasing government regulations. The United States is, by far, the world’s largest Aerospace & Defence market, with revenues close to US$543 billion. The U.S. market is followed by the Europe and Asia, one of the fastest growing markets. In spite of the growing CAGR of A&D industry, it is still adversely affected by rising fuel prices making it a major concern for the recovery and with the potential to affect industry growth. Recent surge in in oil and jet kerosene prices are forecasted to upset the trajectory of the industry. Domestic markets growth also affects the national airlines, whereas business travel and outbound freight tend to improve the CAGR.
Aerospace and Defence Industry Outlook:
Revenue and earnings growth in the commercial aerospace sector is expected to be a bright spot and driving force behind the global aerospace and defence industry growth in 2015.The commercial aerospace sector is expected to set new records for aircraft production in 2015.Global revenues in the defence sector will likely continue to decrease in 2015 at an estimated 1.3 percent. Yet, defence spending is increasing in several areas of the globe. Over the next few years, the defence sector will be challenged in ways as to how to grow profitably in a toppling market and the required action plan to maintain acceptable financial performance.