Deloitte Global: Commercial aerospace industry slowing down, but record backlogs continue
Subsector production grew 6.1 percent in 2014 but expected to slow to 3 percent growth in 2015.
NEW YORK, 9 June 2015—Global aerospace and defense companies added US$12.7 billion in revenues in 2014 according to a Deloitte Touche Tohmatsu Limited Global Manufacturing Industry group (Deloitte Global) study of the top 100 global aerospace and defense companies. Although revenues in the commercial aerospace subsector increased by US$23.7 billion in 2014, the strong growth was partly offset by revenue declines in the defense subsector, which experienced a US$8.2 billion decrease in revenue from 2013 to 2014.
The analysis entitled 2015 Global aerospace and defense sector financial performance study, found that the commercial aerospace subsector in 2014 set new records for sales totaling 2,888 orders; a 6.1 percent increase in deliveries to 1,352; a 14.4 percent growth increase in backlogs reaching a record high of 12,175 aircraft; and revenues reaching US$314.9 billion. The primary drivers of new commercial aircraft sales include increased travel demand, especially in the Middle East, India, and China, as well as replacement of obsolete aircraft with new fuel-efficient models.
The story is not so bright, however, for the defense subsector with a 2.2 percent revenue decline in 2014. “Led by the largest country defense industry, the U.S. has lost close to 168,000 defense jobs since 2010 and revenues of approximately US$11.5 billion in the same period”, said Tom Captain, Deloitte Global Aerospace and Defense Sector Leader.
From a regional viewpoint, the study found that aerospace and defense companies headquartered in the United States accounted for US$408.5 billion of the global aerospace and defense sector revenue, while European companies accounted for US$222.8 billion in 2014. “Europe is also a critical geographic region representing nearly 33 percent of total global aerospace and defense revenues,” said Captain.
In terms of the outlook for 2015, Captain expects global aerospace and defense industry revenues to grow by 1.5 percent, a slowdown from 1.9 percent global industry growth in 2014.
Notes to Editor
Deloitte Global analyzed the 2014 financial performance of 100 major global and US aerospace and defense companies. Key financial indicators analyzed include sales revenue, operating earnings, and operating margins, obtained through public company filings and press releases.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.
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