2018 Global aerospace and defense industry financial performance study

Commercial aerospace sector performance decelerates, while defense sector continues to expand

The global aerospace and defense (A&D) industry recuperated as revenue grew in 2017. However, growth was slower than the estimated gross domestic product (GDP) of 3.1 percent in 2017.

2018 global A&D industry performance: A detailed analysis

The global defense sector had revenues up by 3.9 percent and led the overall industry growth. Heightened global security threats, increasing US defense budgets, and higher defense spending by countries such as India, China, and Japan spurred this growth. In contrast, the global commercial aerospace sector growth slowed by 1.5 percent partly due to a decline in twin-aisle aircraft deliveries in the US. However, backlogs of commercial aerospace continued to remain at an all-time high of 14,215 aircrafts. 

This 2018 study reviews the financial performance of the top 100 global A&D companies or those units of industrial conglomerates with A&D businesses that reported revenues of more than $500 million in 2017. The companies were evaluated based on 19 key financial metrics. The report also draws a comparative analysis of the commercial aerospace and the defense sectors across major markets in the US and Europe.

Key findings

  • Global A&D industry revenues grew 2.7 percent or $18.3 billion in 2017 to reach $685.6 billion.
  • Global defense sector revenues recorded a 3.9 percent increase as defense spending continues to rise across the globe.
  • The commercial aerospace sector’s revenue growth dropped from 2.7 percent in 2016 to 1.2 percent in 2017.
  • The US A&D industry outperformed its European counterparts, led by a robust performance of the US defense sector.
  • Original equipment manufacturers (OEMs) and companies in the electronics segment drove overall revenue growth.
  • The industry’s core operating margins improved in 2017, primarily led by the US.
  • The operating margins for the propulsion segment were mostly flat in 2017 at 17.4 percent but were the highest amongst all segments.
  • The A&D industry productivity continued to improve, up by a solid 8.6 percent in 2017.
  • Employment in the industry was 1.93 million in 2017, marginally up compared to the previous year but the number of companies increasing their headcounts in 2017 was down.
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