2018 Global aerospace and defense industry outlook

This report forecasts the growth of the aerospace and defense industry and identifies major industry trends in 2018. It also looks at the financial performance of the top 20 aerospace and defense companies in 2017.

As it sets the expectations for the coming year, it delves into the sector outlook and sheds light on factors that are driving growth in the commercial aerospace and defense sub-sectors. The report forecasts increased mergers and acquisitions activity in 2018 which lays the foundation for further growth in this space. The outlook answers some key questions such as: What changes will this increased M&A trigger in the A&D industry? What is in store for large prime contractors and small to mid-sized companies?

2018 forecast

• Global A&D industry revenue projected to grow 4.1 percent in 2018
• Commercial aircraft sector revenues expected to grow 4.8 percent as production levels are likely to be robust
• Defense sector revenues likely to record 3.6 percent growth as the US defense budget returns to growth after experiencing multi-year declines
• Commercial aircraft sector’s operating profits estimated to be up 18.5 percent, whereas, defense sector is expected to experience a 10.2 percent increase in operating profits

Regional perspectives-China

• China’s aviation sector is expected to be the world’s largest (by passengers) by 2024
• The country is estimated to have a demand of 7,240 commercial aircraft worth US$1.1 trillion in the next 20 years
• China’s defense budget was the second largest globally in 2017, at US$192.5 billion (up 5.2 percent YoY)
• For 2018, the country is aiming at an 8.1 percent growth in defense budget, making this the largest year-on-year increase in the last three years