Global aerospace, defence sector to grow 3 percent: report
WASHINGTON: Revenues in the global aerospace and defence sector are expected to grow by 3 percent in 2016 after a 0.5 percent decline in 2015, according to a forecast by Deloitte Touche Tohmatsu.
The rebound will likely be driven by strong passenger traffic, continued demand for commercial aircraft from growing economies like India and China, and an expected recovery in global military spending fueled by tensions in the Middle East, the firm said in its annual outlook for the sector.
It said US military spending likely bottomed out in 2015 and was slated to rise slightly in the fiscal 2016 year, which began Oct. 1. Global security threats were also fueling growth in defense budgets in many other countries, it said.
Tom Captain, who leads Deloitte’s aerospace and defence segment, said the commercial aerospace sector will likely boost revenues by 3.4 percent in 2016, buoyed by demand from the Asia-Pacific and Middle East regions.
The worldwide fleet of commercial passenger and cargo aircraft – and the number of passengers flown each year – are expected to double over the next two decades, the report said. Boeing Co and Airbus Group SE have dominated the market since 1997, but at least one additional competitor could enter the market in the next 20 years, it said.
The sector is expected to produce 1,420 large commercial aircraft in 2016, 40.5 percent more than just five years ago. By 2021, production is expected to rise to 1,627 aircraft, an increase of nearly 19 percent from 2015.