Aerospace Industry Looks Cautiously Into 2017
by Ken Allen, on January 16, 2017
The aerospace and defense sectors are cautiously optimistic about 2017, but still have some worries. While the aerospace and defense sectors are approaching 2017 with a generally positive outlook, there are some potential difficulties worth watching out for.
In its report, "2017 Outlook: Global Aerospace & Defense," Fitch Ratings predicts that the commercial aircraft side of the industry is poised to enjoy growth. For instance, by 2018 both Boeing and Airbus are expected to grow overall by 4 percent and increase the number of aircraft delivered by 8 percent. This is largely due to positive trends in global airline passenger traffic spurring new demands for vehicle production.
"The aerospace and defense sectors may have to invest in new efficiencies."
In addition, while the arrival of a new presidential administration in Washington D.C. always has the potential to create uncertainty among industries that specialize in defense, President-elect Donald Trump has expressed interest in bolstering military spending. Additional aircraft orders will help support the industry in the coming years.
However, certain economic and political factors could weigh more heavily on aerospace and defense, such as demands for cost-cutting. Though President-elect Trump appears to support higher defense spending, he has also criticized certain contracts for being too large and has accused manufacturers of cost overruns.
To please the incoming government, the aerospace and defense sectors may have to invest in new efficiencies that will allow them to keep costs down and deliver products under tighter budgetary constraints.
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