Global A&D Outlook

Insights

2017 Global Aerospace & Defence Sector Outlook

Growth prospects remain upbeat

The global aerospace and defence (A&D) sector is likely to experience stronger growth in 2017, following multiple years of positive, but a subdued rate of growth.

The 2017 Global aerospace and defence sector outlook reviews the sector’s performance in 2016 and expectations for 2017. It outlines a long term projection for aircraft production, as well as defence spending by major countries. It also provides perspectives on defence contractor expectations, growth in travel demand driven by wealth creation in Asia and the Middle East, and observations on what it means for the commercial aerospace sub-sector. 

This year’s outlook finds global aerospace and defence (A&D) industry revenues expected to resume growth, driven by higher defence spending.
 

Return to growth

Following multiple years of positive, but a subdued rate of growth, the report forecasts the sector revenues will likely grow by about 2.0 percent in 2017.

The global A&D sector revenue rebound is attributed to a number of factors in both the commercial aerospace sub-sector and the defence sub sector.

Commercial aerospace sub-sector

  • Stable global gross domestic product (GDP) growth, relatively lower commodity prices including crude oil, strong passenger travel demand, especially in the Middle East and Asia Pacific region, will likely drive the commercial aerospace sub-sector growth.

Defence sub-sector

  • Growth in the Defence sub-sector is expected to be primarily driven by the newly elected US Administration’s increased focus on strengthening the nation’s military. 
  • Rising global tensions has led to international demand for defence and military products is increasing in the Middle East, Eastern Europe, North Korea, and the East and South China Seas. This is in turn resulting in increased defense spending globally, especially, in the United Arab Emirates (UAE), Saudi Arabia, India, South Korea, Japan, India, China, Russia – many of these countries have already started to increase purchases of next generation military equipment.

After multi-year declines in revenues, the defence sub-sector is expected to grow at 3.2 percent in 2017. This increase is due to continued concerns about global security threats, growth in US defence budgets, as well as higher defence spending in the Middle East, Japan, South Korea and India

- Tom Captain, Deloitte Global Aerospace and Defence Leader

Previous editions

2016 Global Aerospace & Defence Sector Outlook
Poised for a rebound

2015 Global Aerospace & Defence Sector Outlook
Growth for commercial aerospace, defence decline continues 

2014 Global Aerospace & Defence Sector Outlook
Expect another record year for commercial aerospace and continued declines in defence

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