- ECONOMIC IMPACT -

Latest update: 21 October 

Real GDP growth is expected to bounce back in 2021 if the spread of Covid-19 is controlled by the end of the year, with all major economies set to grow.

The World Trade Organization forecasts the volume of merchandise trade to shrink by 9.2% in 2020, followed by an estimated rise of 7.2% in 2021.

-4.4%

The IMF has revised its 2020 global GDP forecast to -4.4% from an estimate of -4.9% made in June.

 88-115 million

Covid-19 will push 88-115 million people into extreme poverty in 2020, according to the World Bank.

Global real GDP growth

% change on previous year

2.1%

1.8%

-3.8%

Pre-Covid-19 2020 forecast

2019 average

Adjusted 2020 forecast

The cost of Covid-19

$375bn

Estimated monthly cost of th Covid-19 pandemic globally

$12tn

Cumulative loss for global economy over the next two years

- SECTOR IMPACT: Aerospace, defence and security -

Latest update: 4 November

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.

The future role of the military in supporting civil contingency planning is under consideration in several countries, as is a redefinition of security to implicitly encompass protecting public health and biosecurity aspects.

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.

Supply and demand disruption

The US Department of Defense experienced delays of around three months to major defence acquisition programmes.


South Korea, Thailand and Indonesia are cutting defence budgets in response to the crisis, mostly representing programme deferrals rather than cancellations.

Sector focus: armoured vehicles

The armoured vehicles (AV) market has shown some degree of resilience to the impact of Covid-19 compared to aerospace, with the impact mostly being a supply-side rather than demand-side shock.


Stable defense budgets and improvements in the efficiency of defence departments to expedite contract awards has provided reassurance to manufacturers and their supply chains by allowing them to make long-term mitigation plans.


Accelerated government payments and continued orders have also benefitted manufacturers, and have helped sustain military and Covid-19 relief operations, for example in France, the US and UK.


Planned procurement of major programmes, such as the US OMFV project and France’s Serval family of vehicles, provides the necessary momentum for the industry to continue development and invest in the sustainment of its R&D capabilities.

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