Frost & Sullivan, in a recent study of the aerospace and defense industry, predicted industry revenues of $77.29 billion in 2012 will slide to $65.67 billion in 2017.
"Budgetary pressures in North America and Europe are significantly affecting both new aircraft production numbers and delivery revenue on a global basis," it said. "Asia-Pacific and other regions provide some lift to the market, but it is small at this point."
Frost & Sullivan said North America, the mainstay of military fixed-wing procurement, will have minimal growth and Europe, which has already reduced procurement of fixed-wing military aircraft, will remain at replacement spending levels.
"North America is declining in all categories, except new aircraft purchases," said Aerospace & Defense Industry Manager Wayne Plucker. "Europe, on the other hand, will experience moderate growth in both MRO [maintenance, repair and overhaul] and modifications, but declines in new purchases."
The analysis pointed to expected growth in MRO and new aircraft procurement in the Asia-Pacific region where economies are growing and rising budgets are driving both new aircraft purchases and modification plans.