Industry Update: Aerospace & Defense
VRC is proud to release its latest Industry Report. The commercial aerospace sector continues to recover from the pandemic, with travel demand expected to surpass pre-pandemic levels. The recovery has driven increased orders for new aircraft and related services. However, aircraft deliveries have dropped sharply due to production headwinds. Global demand for the industry’s products and services remains strong, with growth being fueled by strong defense budgets reflective of security initiatives in Ukraine, Israel, and the Indo-Pacific region. Supply chain issues and disruptions have continued to improve relative to early 2023 and 2022. The report provides a concise, insightful update on the Aerospace & Defense industry, including recent transactions, market multiples, company performance, and purchase price allocation percentages.
Industry Highlights
- Air travel demand continues to improve. The number of travelers globally is set to hit historic levels, with 4.7 billion people expected to travel in 2024 compared with 4.5 billion in 2019.
- Global demand for the Aerospace & Defense industry’s products and services remains strong. The GFY’25 defense budget is expected to focus on modernizing military capabilities, including investments in advanced technologies such as unmanned systems, hypersonics, and cyber defenses.
- Supply chain delays and disruptions do remain regarding certain items, such as unique semiconductor components.
- Talent acquisition and workforce retention has also improved in the last few quarters. Companies remain focused on hiring, training, and retaining employees.
