Looking Good

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ACCORDING TO A REPORT BY DELOITTE, the global aerospace & defence industry is expected to continue its growth trajectory in 2019, led by growing commercial aircraft production and strong defence spending. In the commercial aerospace sector, aircraft order backlog remains at an all-time high as demand for next-generation, fuel-efficient aircraft continues to surge with the rise in oil prices.

With the aircraft backlog at its peak, manufacturers are expected to ramp up production rates, hence, driving growth in the sector. However, manufacturers could experience supply chain interruptions as some suppliers may struggle to increase production to keep up with the growing backlog. In the defense sector, heightened global tensions and geopolitical risks, recovery in the US defence budget, and higher defense spending by other major regional powers such as China, India, and Japan are expected to drive global defense sector growth in 2019 and beyond.

Coming to India, the economy is expected to expand 7.4% in 2018, but the growth rate will slow down to 7.3% in the next year as domestic demand tapers on higher borrowing cost due to rising interest rates, said a report by Moody’s Investors Service in early November. In its report titled ‘Global Macro Outlook 2019-20’, Moody’s said the economy grew 7.9% in the first half (January-June) of 2018, reflecting the base effect post demonetisation.