- ECONOMIC IMPACT -

Latest update: 20 January

 World Bank forecasts global economic growth at 4% in 2021 as vaccine rollout becomes widespread, following an estimated 4.3% contraction in 2020.

 Chinese economy expands by 6.5% in Q4 2020, taking the full year growth to 2.3% in 2020, according to National Bureau of Statistics.

3.7%

  Consensus forecast for world GDP growth in 2020

6.7%

  Unemployment rate in the US in December 2020, unchanged from the previous month

Global real GDP growth

% change on previous year

2.6%

-3.7%

5.4%

Pre-Covid-19 2020 forecast

Adjusted 2020 forecast

2021 consensus
forecast

The cost of Covid-19

$375bn

Estimated monthly cost of the Covid-19 pandemic globally

$11tn

Cumulative loss for global economy over the next two years

- SECTOR IMPACT: Aerospace, defence and security -

Latest update: 8 January

Defence markets, although relatively shielded from both immediate demand and supply side shocks, are now starting to look vulnerable in many parts of the world as national debates are ignited around fiscal priorities.

Western supply chain concerns stemming from Chinese-US rivalry have been exacerbated by Covid-19. This will result in greater FDI scrutiny, multisourcing and onshoring in key product areas such as microelectronics.

Sector indices

The interdependent relationship between aerospace and defence has helped to cushion the impact of Covid-19 on companies working across both segments. Targeted government aid will be instrumental to recovery in these sectors.

Revenue predictions

Boeing and Airbus post unprecedented losses throughout the year, with last quarter being the worst on record for the global aerospace industry.


Defence is being used as a stimulus measure in markets with large domestic capacity, particularly the US, but there will be medium-term constraint due to fiscal pressures.

Impact on major companies

Boeing and Airbus post unprecedented losses throughout the year, with Q2 being the worst on record for the global aerospace industry. The two primes have now diverged, with Airbus significantly improving their financial performance in Q3.

Raytheon Technologies, now more exposed to civil aerospace since the merger with United Technologies, increased its layoffs to 20,000.

GE Aviation plans up to 13,000 job losses, around a quarter of the workforce. Rolls-Royce plans to cut 9,000 jobs globally, including 3,000 in the UK.

Global aerospace manufacturers have now announced more than 80,000 jobs cuts, 80% in Europe and the US.

Sub-sector impact

Naval shipbuilding: moderate negative impact

Mostly short-term production challenges; defence demand impact only extant in medium term.

Homeland security & soldier systems: moderate positive impact

Thermal imaging cameras, decontamination systems, deployable medical capabilities and personal protective equipment submarkets are seeing immediate boosts.

Uncrewed systems: moderate positive impact

Demand for small form factor drones has increased, with adjustment of civil aviation restrictions being made to allow for this in many regions.

Training & simulation: moderate positive impact

Adoption of distributed synthetic training environments is likely to increase in the medium term.

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