Deliver Your News to the World

Deloitte says global aerospace and defense sector continues to show resilience


LONDON - Despite the downward pressure on defense spending and relatively slow sales in the commercial aircraft and business jet segments, the global aerospace and defense (A&D) industry has continued to show resilience in 2010, according to a new study released today by the Deloitte Global Manufacturing Industry Group. Holding steady: 2010 Midyear outlook for the global aerospace and defense sector, examines the quarterly financial statements released thus far in calendar year 2010 by 25 top global A&D companies.

Sales revenue growth was -1.01%. Operating profit growth was -1.92% and operating margin growth was -0.92%, all pointing to flat financial performance for the first quarter of 2010.

“Despite these growth challenges, the industry remains resilient and performing better than many other sectors hit hard by the recession. The imperative now will be to cut costs and grow top line revenue in new areas to demonstrate to global markets the ability to grow profits again,” said Tom Captain, Global Aerospace & Defense Sector Leader, Deloitte Touche Tohmatsu Global Manufacturing Industry Group.

According to the outlook, defense spending, which is led by the United States (U.S.) Department of Defense, is decreasing, with a 5% drop in research and development spend expected into fiscal year 2011, and a base budget increase of only 1.8% that barely keeps pace with inflation. The United Kingdom (UK) is expected to have a steeper decline in defense spending. However, the study also states that defense expenditure in India is expected to increase to US$32 billion and spending in the Gulf Coast countries is expected to rise dramatically.

“Decreasing defense spend by developed countries will require smarter use of the remaining funds in order to develop and deploy the technologies needed to counter more sophisticated adversaries,” added General Charles Wald (United States Air Force retired), Director and Senior Advisor to the A&D sector, Deloitte LLP in the United States.

Other key findings from the study include:

• Commercial aircraft sales are rebounding, albeit from a low base, with a 127% annual increase through to May 2010.
• Commercial aircraft backlog as of May 2010 stands at 6,600 units, representing six years of guaranteed work, and provides some comfort to suppliers going forward.
• For defense companies, key areas generating new revenue sources include mission capability software integration, battle space simulation, directed energy, precision engagement, threat identification, and energy and infrastructure security.
• The number of merger and acquisition deals is up 10% over last year with more than a 300% increase in the value of deals completed or in process.

“We expect to see more deals by private equity and strategic buyers alike as competition for desirable assets heats up over the next several months,” explains Pauline Biddle, Aerospace & Defense Sector Leader, Deloitte UK & Switzerland Manufacturing Group.
To access Holding steady: 2010 Midyear outlook for the global aerospace and defense sector, please visit:

*As used in this press release “Deloitte” means Deloitte Touche Tohmatsu, a Swiss Verein.

About Deloitte

Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms.

Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than140 countries, Deloitte brings world-class capabilities and deep local expertise to help clients succeed wherever they operate. Deloitte’s approximately 169,000 professionals are committed to becoming the standard of excellence.


This news content was configured by WebWire editorial staff. Linking is permitted.

News Release Distribution and Press Release Distribution Services Provided by WebWire.