HARD HITTING DD

[flyboyjo]

AEROSPACE SECTOR DD

U.S.A.

• The number of commercial aircraft is forecast to grow from 6,727 in 2013 to 8,435 in 2034, an average annual growth rate of
  1.1 percent or 81 aircraft annually
  https://www.faa.gov/about/office_org/headquarters_offices/apl/aviation_forecasts/aerospace_forecasts/2014-2034/media/2014_FAA_Aerospace_Forecast.pdf
  
• In 2012 aviation accounted for 5.4% of U.S. gross domestic product
  https://www.faa.gov/air_traffic/publications/media/2014-economic-impact-report.pdf
  
• Aerospace and Defense industry contributes 2.3 percent of GDP
  http://www.aia-aerospace.org/assets/secondtonone_2pager.pdf

China

• Fixed-wing general aviation aircraft in China is expected to increase by 30 percent per year over the next five to 10 years
  
• Boeing expects Chinese airline demand for airplanes to be at least 12 percent of world demand
  http://www.rand.org/content/dam/rand/pubs/monographs/2011/RAND_MG1100.pdf
  
• China plans to increase its aviation fleet size to 10,000 aircraft from the current 1,610 at a 22 percent annual compound growth
  https://www.kpmg.com/CN/en/IssuesAndInsights/ArticlesPublications/Documents/Investment-in-China-Numbers-and-Trends-201402-v1.pdf
  

Profitability is improving across the global A&D industry

A&D sector earnings, a key financial performance indicator, outpaced revenue growth globally. The sector added US$5.1 billion in global profits, reaching a record US$62.6 billion. Commercial aerospace grew earnings by 15.7 percent, because of more aircraft delivered at lower costs. Defense companies grew earnings by 3.6 percent despite the revenue decline cited above, which was mostly the result of anticipatory cost cuts.

A&D sector share prices outpaced global equity indices

In 2013, despite the fall in defense ubsector revenues and the slowing pace of growth in commercial aerospace, A&D sector hare prices continued to advance at a significantly greater rate than most of the global averages. U.S.-based A&D sector companies outpaced the Dow Jones Industrials and Standard & Poor’s 500 averages at 39.4 percent versus. 28.1 percent and 31.8 percent respectively. European A&D companies outpaced the STOXX 600 index, 41.4 percent to 17.3 percent. Likely contributors to hare price increases for commercial aerospace include the continued increased demand for commercial air travel, increased demand for fuel efficient aircraft, greater subsector profit margins, increased generation of free cash flow, and an expectation of continued above average growth prospects for the subsector.

http://www2.deloitte.com/content/dam/Deloitte/de/Documents/manufacturing/Global_AD_Sector_Financial_Performance_Study_2014.pdf