FARNBOROUGH — Consulting firm Deloitte has released a report for the Farnborough Air Show 2018 regarding the valuation of the aerospace industry.
For the Global Aerospace and Defense industry, revenues grew by 2.7% or by $18.3 billion in 2017 to reach $685.6 billion respectively.
The overall industry growth rate increased from 2.4 percent in 2016, yet was slower than the 2017 estimated GDP growth of 3.1% as the commercial aerospace sector growth slowed down to 1.2% in 2017.
For the commercial side of the aerospace industry, revenue growth has decreased by 1.2% in 2017 from a growth of 2.7% in 2016.
The sector added an additional $4 billion in revenues to reach $323.1 billion in 2017. The decline was pointed towards the slow-down in twin-aisle aircraft deliveries across the US.
The sector in the US remained soft, which represents an increase of 1.3% in 2017 whereas the European sector experienced stronger growth of 3.7% as the region experienced higher aircraft deliveries during the year.
For the global defense sector, revenues spiked by 3.9% as defense spending continues to rise across the many governments across the world.
This 3.9% growth rate for 2017 helped the industry reach a value of $361.5 billion.
This was largely driven by the US Army, where their defense sector revenues increased by 4.5 percent due to higher funding from the Department of Defence.
For the European defense sector, revenues in the region grew by 2.6% in 2017, comparing to a mere 0.6% in 2016.
This is due to the driving growth in the defense sector in Europe from the increased pressure from the US on NATO members to increase military expenditure to at least 2% of their total GDP.
Ultimately, as Farnborough begins this week, we can see the value rising due to the new orders that are to be announced over the course of this week, both in the commercial sector but also in the defense sector respectively.
It wouldn’t be hard to estimate that by 2018, Deloitte will probably predict a value in excess of $700 billion respectively.
Airways is LIVE at the Farnborough Airshow 2018. Follow our rolling coverage on Twitter at @AIRWAYSLIVE and @AIRWAYSMAGAZINE.