Survey Reveals Commercial Aerospace Poised for Growth While Defense-Related Spending Declines
News Release -- July 09, 2012
FALLS CHURCH, Va., July 9 – Commercial markets appear to be ramping up while Defense-related business is poised for a potentially sharp decline. Both segments appear to be refocusing on core competencies in anticipation of change. These findings were uncovered in a study of A&D decision makers conducted by CSC (NYSE: CSC) and Aviation Week & Space Technology in the 2012 Aerospace and Defense (A&D) Market Survey.
Additional highlights include:
· Large body commercial aviation is poised for a banner year whereas contractors dependent on defense and government spending are preparing for sequestration and sharp spending reductions.
· Companies are increasingly being forced to achieve lead time requirements that are stretched over a diverse and complex supply chain. They are stretching existing resources without hiring or expanding due to worldwide economic and political uncertainty.
· Growth opportunities are focused around domestic markets and products versus prior years’ focus on services and international expansion.
· Continued investment in engineering and research and development is seen as a path to new markets and innovation.
· Commercial growth is seen as a larger opportunity than defense or public security.
“Companies are focusing on what they know and do well as they simultaneously ramp up in one business segment and prepare for the possibility of massive budget cuts and layoffs in another,” said Tim Ellis, vice president of CSC’s Aerospace and Defense Group. “In an uncertain global economy, the industry is bolstering its focus on core competencies to meet rapid changes in product mix and demand.”
Key themes surfacing within the A&D industry include:
Strategy and Growth
Historical interest in new market spaces for aftermarket support, performance based logistics or as Systems Integrators has been replaced with an increased focus on designing innovative products, improving efficiency, lowering costs and improving customer satisfaction.
Maintenance, Repair, Overhaul and Sustainment (MRO)
Firms that provide MRO are increasing their services and offerings to serve a broader base of client needs. Conversely, many firms that do not offer MRO services are not expanding due to concerns that they lack the knowledge to successfully expand from product to repair.
Engineering continues to be viewed as a competitive advantage with the highest potential of all functional areas to positively impact the bottom line within A&D companies. As a result, companies are investing heavily in engineering and the innovative product pipeline.
“CSC’s industry survey historically has been one of the more insightful barometers of the issues and trends that will define the aerospace and defense sector for the next 3 to 5 years,” said Anthony L. Velocci, Editor-in-Chief of Aviation Week & Space Technology. “Industry professionals will find the information that the survey produced most useful in their strategic planning.”
For complete results of the CSC 2012 A&D Market survey, conducted in the Spring of 2012 in collaboration with Aviation Week & Space Technology, visit www.csc.com/2012A&DSurvey.
CSC is a global leader in providing technology-enabled business solutions and services. Headquartered in Falls Church, Va., CSC has approximately 98,000 employees and reported revenue of $15.9 billion for the 12 months ended March 30, 2012. For more information, visit the company’s website at www.csc.com.