Study shows A&D's resilience

The study, which evaluated the financial performance of the 91 global companies with revenues exceeding $500m (£340m), revealed that global A&D revenue in 2009 remained essentially flat, with a slight 1.3 per cent increase over 2008 to $635bn. However, operating earnings decreased 15.3 per cent to $47.9bn, while operating margins fell 16.4 per cent to 7.5 per cent.

‘The A&D market has weathered the storm of the financial crisis well, due primarily to the fact that the industry relies on long-term contracts that protect it from short-term economic events,’ said Pauline Biddle, UK head of aerospace and defence at Deloitte.

‘In addition to this, the growing need for global defence, security and humanitarian aid have helped the industry through recent economic challenges. However, as the sector looks to increase revenues and profitability, it is still faced with significant obstacles, such as shrinking defence budgets, exchange-rate volatility and financing constraints.

‘Future growth in the A&D industry will vary by global region, with the most significant growth expected to come from the East, with India and the Middle East identified as the key markets. Further, it is likely that certain A&D product sub-sectors, such as data protection, biometric and domestic security technologies, will outperform others in the short to medium term. These are areas where the UK is strong with a good track record of innovation.’