Now that we’re settling into 2019, it’s a good opportunity to look at this year’s forecast for large
OEMs and small- to mid-sized aerospace and defense (A&D) companies. In today’s blog post
we recap highlights from Deloitte’s 2019 Global Aerospace and Defense Outlook. Deloitte, a
multinational professional services network, put together this report, compiled by Robin
Lineberger. We believe key components are of special interest to our readers in the A&D
Notable 2018 Events Set the Stage for Upward Growth
2018 was a strong year for the A&D industry. Fueled by the demand for passenger travel and
worldwide military expenses, this past year set a growth trajectory for both these divisions.
Specifically, backlogged aircraft orders remain at an all-time record-breaking high. Next-
generation, fuel-efficient aircraft is in and the demand is surging in tandem with rising oil prices.
The only drawback is that manufacturers may experience supply chain interruptions to keep up
with the backlog.
Regarding defense, increased global tension and elevated defense spending from other
countries like China, India, and Japan anticipate a similar boost in the defense sector.
Unpacking the Details
- Commercial Aircraft: The Deloitte report cites that the commercial aircraft backlog is currently at a peak of more than
14,000, and that this number is expected to increase to 38,000 over the next 20 years. 2018
produced more than 1,600 units and another 100 units are projected to be delivered this year.
Wide-body aircraft demand could weaken as airlines await more efficient, next-gen widebodies.
Capabilities of narrow-body craft have also expanded, impacting wide-body demand. Suppliers
may face difficulties in ramping up production, so manufacturers should focus on strengthening
the supply chain, streamlining program management and employing advanced technology to
Another potential challenge to maintaining the supply chain are new production programs in
countries like Russia and China. However, to challenge the US industry they would need
endorsement from global airlines, regulator certifications, and a consistent track record before
they are a threat.
- Military Defense: The Whitehouse is pushing increased defense budgets. This increased focus on strengthening the military is projected to continue throughout 2019. NATO countries also appear to be following suit, and India, China, and Japan are increasing defense spending to
counter security threats. The Middle East and North Korea, in addition, are generating stronger needs for military equipment. All these factors combine to drive defense sector growth.
Threats are more than land, maritime, and air-based at this point in our civilization. Now we
must worry more about cyber-related threats, which means military strategies are evolving and
integrating digital technology to keep up with the velocity of digital threats. Deloitte is also hitting
on possible threats carried via satellite, anticipating that the future of military defense technology
will focus on digital tools and the possible militarization of space.
Knowing the prediction of major markets gives manufacturers and suppliers a leg-up for the
year and beyond. At etaGLOBAL, we stay current with the latest trends and news in the
industry, reporting back to you. For more information on 2019 trends in the A&D industry, get in
touch with us.