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Growth tipped for world's defense, aerospace sectors

Management consultancy says revenue growth in the world's defense and aerospace sectors is expected to grow in 2016 because of larger budgets and terrorist threats.
By Richard Tomkins   |   Jan. 6, 2016 at 4:43 PM
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NEW YORK, Jan. 6 (UPI) -- Revenue growth is expected to return to the world's defense and aerospace sectors this year due to an increase in the budgets of major countries and a resurgence of global security threats.

Management consultancy Deloitte Touche Tohmatsu Limited, in its 2016 aerospace and defense sector outlook report, says total sector revenues are estimated to grow at 3.0 percent compared to 1.9 percent growth in 2014, and an expected decline of 0.5 percent in 2015.

"Defense budgets in the U.S., United Kingdom, France, Japan, several Middle Eastern countries, and other nations are increasing at a time when national security threats are being heightened," says Tom Captain, Deloitte Global Leader, Aerospace and Defense Segment. "Global revenues in the defense sub-sector are expected to return to growth in 2016, as governments equip their armed forces with modern defense weapons platforms and next-generation technologies, including cyber, intelligence gathering, defense electronics, and precision strike capabilities."

The commercial aerospace sub-sector is expected to continue its decade-long trend of above-average growth rates, driven by growth in passenger travel demand and an accelerated equipment replacement cycle.

"Strong increases year over year of global revenue passenger kilometers are leading to an unprecedented level of aircraft production rates, which in 2015 were about twice the levels experienced 10 years ago," said Captain.

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