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AEROSPACE and DEFENSE INDUSTRY INSIGHT

AEROSPACE and DEFENSE INDUSTRY INSIGHT

The global Aerospace and defense sector is likely to register growth in 2016 over the decline in past few years from 2012 to 2015. During 2016, the industry is likely to record 3% increase in revenues as compared to 0.12% decline in 2015.

Increase in passenger travel and decline in oil prices will increase the revenues in aerospace sector. The industry witnessed fall in revenues over the recent past, largely due to cuts in global military expenditures and dollar fluctuations.

On the defense industry front, over the near term future, revenues are likely to soar as global military budgets are expected to increase significantly. Increasing security concerns worldwide are encouraging countries to increase their military budgets.

Increase in defense sector budgets is due to rise in tensions over regional qualms in Middle East, Eastern Europe, North Korea and the East and South China Sea. Middle East counties like UAE, Saudi Arabia and Asia Pacific countries like India, China and South Korea and European countries like Russia and other affected countries are already starting to increase purchasing of next generation military equipment.

The commercial aerospace sector is likely to experience strong growth in its revenues due to increase in production and demand for the next gen air carriers and increase in the passenger traffic in Asia-Pacific and Middle East regions. Due to increase in GDP mainly in India and china and also in Middle East and other regions in Asia-Pacific passenger travel and freight transportation are increased. It is expected that the passenger and freight travel is expected to increase at an average of 4.6 and 4.4 percent respectively for the next 20 years. Aircraft manufacturers Airbus and Boeing has combined order book of over 12,400 at the end of third quarter of 2015. Over the next 20 years it is expected that the demand for the new aircraft production is over 35,000 units, considering the past orders and the increase in the passenger and freight transportation.