Deloitte, the business advisory firm, has released a study of the global aerospace and defence (A&D) industry’s financial performance in 2009, finding that despite the recession the sector remains resilient.
The study, which evaluated the financial performance of the 91 global companies with revenues exceeding $500m, revealed that global A&D revenue in 2009 remained essentially flat, with a slight 1.3% increase over 2008 to $635bn. However operating earnings decreased 15.3% to $47.9bn while operating margins fell 16.4% to 7.5%.
Pauline Biddle, UK head of aerospace and defence at Deloitte, commented: “The A&D market has weathered the storm of the financial crisis well, due primarily to the fact that the industry relies on long-term contracts which protect it from short-term economic events. In addition to this, the growing need for global defence, security and humanitarian aid, have helped the industry through recent economic challenges. However, as the sector looks to increase revenues and profitability, it is still faced with significant obstacles such as shrinking defence budgets, exchange rate volatility and financing constraints.
”Future growth in the A&D industry will vary by global region, with the most significant growth expected to come from the East, with India and the Middle East identified as the key markets. Further, it is likely that certain A&D product sub-sectors such as data protection, biometric and domestic security technologies will outperform others in the short to medium term. These are areas where the UK is strong with a good track record of innovation.”
The study also found that US A&D companies were more profitable and grew faster than their European counterparts.
You can now view all QMT Magazine issues on your favourite tablet or smart phone.
Download the free Quality Manufacturing Today App from the Apple iTunes App Store or from QMT Magazine on Google Play.