AEROSPACE & DEFENSE
The global aerospace and defense industry has experienced steady growth, reaching a market value of $856.62 billion in 2023, with a compound annual growth rate of 7.5%. Despite challenges like the Russia-Ukraine war and supply chain disruptions, the industry is projected to continue expanding, with an estimated value of $1,076.56 billion by 2027.
North America leads the global market, while emerging markets, particularly in space and air advanced mobility (AAM), are gaining traction. Over 347 entities worldwide are working on aircraft concepts and designs, focusing on the future of mobility.
TRENDS & CHALLENGES
In 2023, the aerospace and defense industry grapples with the lingering effects of the COVID-19 pandemic and the Russia-Ukraine war. Workforce shortages and supply chain disruptions have led to increased complexity and higher costs. To address these challenges, companies are prioritizing the establishment of resilient supply chains, diversifying sourcing strategies, and strengthening relationships with suppliers. Embracing digital technologies to enhance efficiency, agility, and supply chain visibility is another prominent trend within the industry.
Companies are also investing in talent development to acquire advanced digital skills. Additionally, decarbonization efforts and sustainable aviation fuels are gaining traction to reduce emissions and meet sustainability standards.
Geopolitical tensions, natural disasters, and the remnants of the COVID-19 pandemic continue to impact the aerospace and defense industry in 2023. However, recovery and growth are expected in the second half of the year and looking ahead to 2024. Unmanned systems, hypersonic technology, cybersecurity, autonomous systems, drones, and space-related activities will drive industry dealmaking.
Supplier diversification and a focus on sustainability and environmental responsibility are key trends for the coming years. Implementation of digital technologies in the aerospace industry has the potential to yield cost savings of $30 billion per year by 2030 and reduce carbon emissions by up to 50% by 2050. Private equity firms will play a vital role in the industry's rebound, aligning with government budget spending.
Disclosure: These key performance indicators are based on industry averages for a company with $10 million in revenue. The KPIs are not specific to the operational performance of your company or your sub-sector.
The information contained has been obtained from different sources deemed reliable, including DealStats, Deloitte, Dun & Bradstreet, and Business Reference Guide. Pacifica Advisors does not make any representation or warranty as to the accuracy of the data. PA is a mergers and acquisitions (M&A) advisor and business broker.