Mary-Louise Hoffman
Moody’s Investors Service has forecasts that high demand for large commercial airplanes will continue to offset the impact of U.S. military spending cuts on defense contractors.
The credit rating agency has also offered a stable outlook for the aerospace and defense industry in the firm’s “Commercial Growth to Offset Tough, But Improving, Defense Environment” report, Moody’s said Wednesday.
Russell Solomon, a Moody’s senior vice president, said A&D sector profitability is projected to grow 2 percent to 4 percent over the next 12 or 18 months.
“The adverse effects of recent spending cuts will however be evident in the financial results of defense contractors for the next two years,” Solomon added.
He also noted in the report that improvements to airline profitability, gross domestic product and passenger traffic rates would back the large commercial aircraft demand in the coming years.
Moody’s also foresees up to 3 percent growth in commercial aircraft deliveries for 2016.
