2019 Global Aerospace and Defense Industry Outlook

《2019 global aerospace and defense industry outlook》is drafted by Deloitte Global Aerospace and Defense team, and translated by Deloitte China ER&I industry. This report explained the global A&D industry recuperated and experienced a solid year as passenger travel demand strengthened and global military expenditure continued to rise.

Manufacturers are ramping up production to accommodate growing aircraft demand, consider deepening their focus on strengthening the supply chain, effective program management, and the use of advanced technologies to enhance productivity and efficiency. With the rising demand for commercial aircraft, there are some new production programs emerging from outside the United States and Europe, especially from Russia and China.

Geopolitical tensions are continuing to intensify and demand for military equipment is on the uptick, driving defense spending across the globe. Although traditional threats (land, maritime, and air-based) continue to emerge, technological advancements and digitization have also led to cyber-related threats. Moreover, space is becoming an important part of the overall defense industry ecosystem.

Changes in the international trade agreements likely to disrupt the global supply chain and increase costs. Free trade is important to the A&D industry as aircraft and arms exports drive revenue growth, especially for companies from the developed world.  

OEMs continued to put pressure on suppliers to reduce costs and increase production rates, which, in turn, pushed many suppliers to consolidate for scale, cost-effectiveness, and higher negotiating power. The industry is likely to experience increasing M&A activity even when valuations of A&D companies are high and near pre–financial crisis levels.