Recovery signalled as spending starts to rise

Companies that cannot benefit from both the rebound in the commercial market and the growth in US defence spending risk being left behind as the recovery gathers pace. This is the picture that emerges from the Flight International Aerospace Top 100 survey, prepared by Roland Berger Strategy Consultants using 2003 financial data.

The survey suggests that 2003 was the bottom of a trough that was no deeper than the downturns of the early 1980s and mid-1990s, says Roland Berger partner Neil Hampson. Revenues for the Top 100 were flat to declining, with little or no organic growth, and margins reached a low point, pushed down by restructuring costs and pricing pressure in the commercial market.

But there were positive signs, with growth in US defence spending starting to show in company bottom lines, and research and development spending up on 2002 in percentage terms. Companies are well positioned to benefit from the recovery, says Hampson, as illustrated by strong first-half 2004 results now being reported.

GRAHAM WARWICK / WASHINGTON DC

Source: Flight International