Military and aerospace (mil/aero) firms have weathered quite an economic storm, but industry analysts are now predicting growth in aerospace and defense spending.
This month, Research and Markets released its “Future of the US Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2018″ report, in which defense spending in the U.S. is predicted to increase at a compound annual growth rate (CAGR) of 1.93 percent through 2018. Expenditures on homeland security solutions, including surveillance equipment and patrol vessels, will also grow from $60.7 billion in 2013 to $65.3 billion in 2018, representing a CAGR of 2.15 percent.
Commercial aerospace has been a bright spot in the mil/aero market and it continues to be so.
Airbus this month unveiled its global market forecast for 2013 through 2032. Taking into account population growth, urbanization, emerging markets, and environmental impact, Airbus officials expect air traffic to grow at a rate of 4.7 percent annually. This growth will drive demand for more than 29,220 new passenger aircraft and freighters, having a value of roughly $4.4 trillion.
The Boeing Company released its annual Current Market Outlook (CMO) in June at the Paris Air Show. In the 2013 through 2032 forecast, both passenger traffic and cargo traffic were predicted to grow 5 percent annually. Boeing projects long-term demand for 35,280 new airplanes, valued at $4.8 trillion, over the next 20 years. In fact, the world fleet is expected to double over the next two decades.
Investment in space-related systems, in civil and military satellites and spacecraft, is another high spot. (This mil/aero geek apologizes for the pun and delves into space in the next installment).