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Defense Industry Stumbles in and out of Recession

Industry revenues dropped four percent in 2009

Boston, MA - December 20, 2010 – With defense budget cuts, the defense industry appears to have entered the early stages of a downward spiral. The Strategy Analytics Advanced Defense Systems (ADS) reports, “Defense Industry Company Profiles,” contain analysis of revenue and profitability for 20 leading defense companies, observing that growth trends from previous years were reversed in 2009.

Industry revenues dropped four percent in 2009, compared to the eleven percent year-on-year growth in 2007 and 2008. Thus, the defense industry five-year compound annual growth rate for the 2005-2009 timeframe fell by almost half, resulting in only three percent growth versus a CAGR (compound annual growth rate) of seven percent over 2004 through 2008.

“Of more concern for the defense sector, industry profitability dropped significantly year-on-year by over 42% in 2009,” notes Asif Anwar, Director at Strategy Analytics. “This industry is facing significant challenges as defense budget cuts to major programs impact traditional business models.”

“2010 has been a year of adjustment for the industry overall, however defense companies with advanced electronic technology capabilities, will see returning growth,” predicts Eric Higham, North American Director for ADS. “Demand will return with a particular emphasis on implementing advanced technologies for existing platforms.”

This two-part series of reports highlights strategic analysis and commentary covering:
  • BAE Systems
  • Boeing, Cobham
  • EADS
  • Finmeccanica
  • General Dynamics
  • Harris Corporation
  • Honeywell
  • Israel Aerospace Industries
  • ITT Corporation
  • L-3 Communications
  • Lockheed Martin
  • Mitsubishi Heavy Industries
  • Northrop Grumman
  • Raytheon
  • Rosboronexport State Corporation
  • Saab
  • Textron
  • Thales
  • United Technologies


Press release contact

Asif Anwar
Phone number: +44 1908 423635
Email: Contact me
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