Aerospace and Defense Industry: A Global Outlook
San Jose, California (PRWEB) February 08, 2012
Follow us on LinkedIn – The aerospace and defense (A&D) industry is influenced by a wide range of factors, including technological, political, social, and economic variables. Despite facing several hurdles over the years, including dot.com bust early this millennium followed by 9/11 tragedy, protests over war in Iraq and Afghanistan and most recently the global economic recession, the aerospace and defense industry continues to retain its importance primarily because national safety and air transportation are building blocks for strong economic development for any nation. Being highly capital-intensive and also requiring regular flow of investments for R&D, technology developments, and maintenance of facilities/equipment, the industry requires continued government support and participation.
Given its sensitivity to economic health, and political changes, the global aerospace industry went through a rough patch during 2008 & 2009. The commercial aerospace segment especially came under the yoke of recession with the market witnessing significant weakening in business prospects, such as, decline in air travel, reduced number of flight trips, cancellation of new aircraft orders, postponement of new aircraft deliveries, especially in the developed markets. With several airline companies slipping into the red, fleet expansion and/or fleet replacement was also adversely impacted. One of the major casualties of the recession was the business/corporate jets market, as cash starved companies resorted to belt tightening measures putting an abrupt end to luxury air travel. With several companies selling off company planes, corporate aircraft manufacturing took a hurting blow. The erosion in personal wealth and scale back on spending by High Net Worth Individuals (HNWIs) has hurt the market for private aircrafts. The deterioration in general global trade conditions and the ensuing collapse of regional export markets critically distorted air cargo/freight traffic, thus reducing the need for global air freighter fleet, and as a result production of air cargo crafts.
In comparison, the defense industry although performed better during this period was not completely immune to the recessionary trends. Cutbacks on military budgets was a common feature in most of the weaker nations, as military spending drained the economy against a backdrop of fewer jobs, and slower growth. Although the financial crisis led many countries, both developed and developing, to lower their defense budgets, governments continued to focus on critical defense operations, injecting necessary funds as and when required despite the fiscal deficit and heavy borrowing. Powerful economies like the United States, China, Russia, Brazil and India especially perceive military spending as a long-term strategic investment vital for national safety and security, and as a result, military budgets in these countries have been relatively shielded. Given the risks involved in pruning down budgets for the defense sector, especially during a recession, governments across the world have continued with their long-term programs to upgrade and develop air defense assets and equipment, thereby providing the much required respite to the overall industry.
In the upcoming years, continued industrial development and expansion in commercial operations of business organizations across the globe will support the development of global aircraft industry. This is because any development in business activity translates into increased business trips, rise in air passenger traffic, and subsequent demand for more number of air flights in operation, thereby creating demand for sophisticated passenger aircraft.
Global growth will also be fuelled by strong demand from developing regions. Robust growth in civil aviation sector in Asia-Pacific is forecasted driven by rapid industrialization, urbanization, fast-paced economic growth, and favorable demographics such as huge population, growing affluence of huge middle-class segment, increase in consumer spending power, and subsequent increase in air traffic, especially in emerging markets such as China and India. Improvements in defense budgets in line with resurgence in economic growth will additionally lend traction to growth.
The research report titled “Aerospace and Defense Industry: A Global Outlook” announced by Global Industry Analysts, Inc., provides a collection of statistical anecdotes, market briefs, and concise summaries of research findings. The report offers a rudimentary overview of the industry, highlights latest trends and demand drivers, in addition to providing statistical insights. Regional markets briefly abstracted and covered include US, Canada, Europe [France, Germany, Russia, and UK] Asia-Pacific [Australia, China, India, Japan, Korea] Latin America [Brazil, and Mexico] and the Middle East. The report offers a compilation of recent strategic corporate developments and product launches. Market discussions in the report are punctuated with a number of fact-rich market data tables. Also included is an indexed, easy-to-refer, fact-finder directory listing the addresses, and contact details of companies worldwide.
For more details about this comprehensive industry report, please visit –
About Global Industry Analysts, Inc.
Global Industry Analysts, Inc., (GIA) is a leading publisher of off-the-shelf market research. Founded in 1987, the company currently employs over 800 people worldwide. Annually, GIA publishes more than 1300 full-scale research reports and analyzes 40,000+ market and technology trends while monitoring more than 126,000 Companies worldwide. Serving over 9500 clients in 27 countries, GIA is recognized today, as one of the world's largest and reputed market research firms.
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