Military and aerospace electronics are under threat as budget cuts become a possibility as wars in the Middle East continue to wind down, a research paper investigates.
The military and aerospace industry has previously been a relatively stable market for system suppliers – providing a steady revenue source paired with considerable room for growth over the past several years.
The latest Electronics.ca Research Network paper investigates this industry – as new threats over budget cuts in the US are making change a possibility.
These industries have been less susceptible to the ups and downs of the commercial and industrial markets in the past – this is due to a steady stream of government spending, fuelled by the ongoing war efforts and ever-present need for newer and better technology.
The U.S is the world’s largest military and aerospace market, and if the wars in the Middle East continue to wind down and economic spending remains tight, budget cuts are likely.
The U.S defence departments plan already to cut 78 billion dollars in defence spending over the next five years, with some European countries following suit.
The military sector however, continues to account for the majority of spending in this market, and has grown by six percent from 2010 reaching 2.33 billion dollars this year.
This is also expected to continue growing at an annual growth of six percent over the next five years to reach three billion dollars.
Electronic distributors are having to adapt to different market trends – of which shorter business cycles with a renewed focus on reliability, and demand for commercial ‘off the shelf’ solutions are particularly popular. – These solutions enable the customer to purchase and modify a system instead of buying custom components to build that same system.
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