Aerospace & Defense Sector Spotlight - Summer 2025

Report Highlights

Recent Elements Affecting the Dynamics and Outlook of the Aerospace & Defense Sector

• The Aerospace & Defense sector experienced mixed revenue growth in Q1 2025, driven by global increases in defense budgets, recovery of the commercial aviation sector, technological innovation, space sector expansion, and trade policy uncertainty.
• The defense sector is experiencing significant expansion, propelled by a notable rise in government expenditures globally linked to the conflicts in Ukraine and the Middle East.
  • Globally, governments continue to allocate investments in advanced technologies such as hypersonic missiles, autonomous systems, and advanced drones in response to these geopolitical tensions.
  • Defense contractors are increasingly utilizing AI and digital engineering, enhancing capabilities such as predictive maintenance, supply chain management, and development of unmanned systems.
• The Space sector is also experiencing heightened demand due to heightened interest in satellite constellations, lunar missions, and orbital defense systems.
• Aggressive trade policies and increased tariffs are a concern for both aviation manufacturers and defense contractors. A potential trade war would adversely affect these companies’ abilities to export planes, ships, and related defense equipment. 

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Reach out to Dinan Capital Advisors Managing Director Tom Gerlacher for more report insights.