Global aerospace and defense sector financial performance study 2015
Growth slowing, profits improving
The 2015 global aerospace and defense sector financial performance study has just been released. This study analyzes the top global 100 aerospace and defense (A&D) companies or A&D business units of industrial conglomerates.
Revenue growth in the global aerospace and defense sector is declining, at a pace lower than gross domestic product (GDP) growth
• Global A&D sector revenues grew by 1.9 percent in 2014, slower than global gross domestic product growth of 2.6 percent.
• Globally, the commercial aerospace subsector increased revenue by US$23.6 billion in 2014, an 8.2 percent increase over 2013. This growth was partly offset by revenue declines in the defense subsector of US$8.2 billion or a 2.2 percent decrease from 2013 to 2014.
Commercial aerospace set new records for sales orders, deliveries, order backlogs, and revenues
• Global commercial aerospace companies achieved the highest levels of these four specific growth metrics in the sector in 2014.
• Sales orders grew from 2,858 in 2013 to record levels of 2,888 sales orders in 2014, while aircraft deliveries increased by 6.1 percent from 1,274 to 1,352 deliveries.
• At current production rates, commercial aerospace has a 9-year backlog of future production.
• Revenues grew by 8.2 percent, from US$291.2 billion in 2013 to US$314.9 billion in 2014.
US defense subsector revenues continue to decline with the bottom expected next year
• This is primarily due to the drawdown of large armed forces engaged in operations in the Middle East and continued declines in funding by the US Department of Defense (DOD), the largest sector customer, whose budget decreased by 4.7 percent in 2014.
Tom Captain, Deloitte LLP – photo Deloitte