- ECONOMIC IMPACT -

Latest update: 17 February

The IMF projects global economic growth at 5.5% for 2021 which is an upward revision from the 5.2% rise estimated in October 2020.

After weeks of gradual decline, GDP estimates for many countries have levelled off. Negative GDP growth is forecast in all countries except China.

-3.7%

  Consensus forecast for world GDP growth in 2020

6.9%

Unemployment rate in OECD nations in December 2020

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: 3 March

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.

Sub-sector impact

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.

Military aerospace: moderate negative impact

Supply chain disruption from commercial aerospace impact and Covid-19 overall, and possible impact on low TRL level programmes or legacy support programmes in favour of active production lines as an immediate stimulus measure. US Air Force modernisation strategy could be impacted.

Land platforms: moderate positive impact

Elements of limited exposure to broader automotive industry supply chains but little impact on programmes so far. Higher levels of domestic capability across regions compared to naval and aerospace and less regulated supply chains mean future readjustment should be easier.

Homeland security & soldier systems: moderate positive impact

Thermal imaging, decontamination systems, deployable medical and personal protective equipment markets are seeing an immediate boost.

Credit: L3Harris

C4ISR and EW: moderate positive impact

Military cybersecurity IT subsectors well positioned in the medium term as a result of demands on distributed working and secure collaboration.

Naval shipbuilding: moderate negative impact

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

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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