McKinsey & Co Defence Outlook 2017

Defense outlook 2017: A global survey of defense-industry executives

Business leaders are growing more optimistic and think they can head off challenges from commercial firms.

In October 2014, Mckinsey conducted a second survey of senior executives from aerospace and defense companies around the globe to take the pulse of the industry and its outlook for the next three years. Thirty-seven industry leaders responded. More than one-third of the respondents are C-level executives, while most others hold positions as senior vice presidents or managing directors. The respondents represent business activity across Asia, Europe, and North and South America. Their questions covered global defense spending, industry trends, challenges in the current business climate, and opportunities for continued growth.

The research yielded some fresh insights and a couple of surprises. While the majority of those who responded to the previous survey in December 2012 anticipated a marked decline in global defense spending, the outlook now is improved. Nearly two-thirds of those surveyed in 2014 believe that global defense spending will stabilize or even return to a modest level of growth. That growth, however, will come in unexpected ways, outside of traditional home markets and in new segments. In this article, McKinsey look at the market shifts that respondents identified and the areas where companies expect to find pockets of growth.

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