News & Analysis

Covid-19 Executive Briefing

Understanding the economic impact of the Covid-19 pandemic and the implications for the defence sector

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Latest update: 16 June 2020


Global foreign direct investment flows are forecast to fall by up to 40% in 2020, from a value of $1.54tn in 2019, according to UNCTAD.


Global economic growth is forecasted to contract by 8.6% (YoY) in Q2 and bounce back to record a 3% growth in Q1 2021. (Morgan Stanley)

The British economy contracted sharply by 20.5% in April compared to 5.8% decline in March, according to the Office for National Statistics.

The Congressional Budget Office of the US foresees economic growth to contract by 11% in Q2 2020 and deficit to swell to $2tn in 2020.

Impact of Covid-19 on asset prices

- Sector Impact: Aerospace, Defence & Security -

Equity indices show the sector's recovery trajectory

Monthly M&A volumes (completed or announced, indexed to 100 in Jan 2019)

Jobs index, representing adjusted active jobs per company

Quarterly filings sentiment (green = positive, red = negative)

Impact On M&A activity

M&A volumes have fallen off a cliff since January 2020. Extensive lockdown measures in major economies made deal-making particularly difficult.

The M&A market will recover, but GlobalData explects to see fewer deals over $1bn in the short term.

Business priorities have changed and this will impact acquirers' M&A strategy.

Expect more investments in weak business areas highlighted by COVID-19 crisis, such as digitalisation and cybersecurity.

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