Defence to shrink, commercial aircraft production to grow in 2013 – report


The global defence industry’s revenue will most likely continue to slide as a result of cuts in military spending, while the commercial aircraft industry will likely have record revenues in the coming year, according to a new report launched this week by Deloitte.

“The global defence industry should expect to see more aggressive competition for fewer large defence programs. Renewed foreign military sales efforts into new geographic markets that face increasing national security threats should offset part of the decline,” said Tom Captain, vice chairman and US and Global Aerospace and Defence (A&D) leader at Deloitte LLP.

However, in contrast to cuts in defence spending, the commercial aerospace sector is expected to reach record levels of revenue in 2013 as a result of increased production rates and the introduction of next generation aircraft, Deloitte said. “In the commercial aircraft sector, expect to see 2013 continue with the trend of global production levels above 1,000 aircraft per year for the third year in a row,” said Captain.

The overall combined revenues for the A&D industry are expected to increase modestly in 2013 given large increases in global revenues for commercial aerospace, coupled with declines in defence spending. The balance of defence and commercial production activity should provide the diversification the A&D industry may need to continue to thrive and grow next year.
“Continued innovations that are the hallmark of this industry should power the next generation of technology development that can contribute to safer, more fuel efficient aircraft, as well as more capable weapons to help keep our war fighters out of harm’s way,” said Captain.