Although the Democrats gained a majority in Congress this past Election Day, it's unlikely that will impact the future of the aerospace and defense industry, as the industry is currently facing other long-term issues, according to a Standard & Poor's semi-annual report, Aerospace & Defense: Industry Survey.
Standard & Poor’s Equity Research identified several factors which can lead to sustained, long-term growth in the aerospace and defense industry.
These factors include the need to upgrade military equipment following extended tours in Iraq and under-investment during the late 1990s and the early part of this century, continued spending on homeland defense and anti-terrorism systems, and the absence of a well-defined plan for early U.S. troop withdrawals from Iraq.
“The results on Election Day and the removal of Donald Rumsfeld as Secretary of Defense have created a bit of uncertainty in the defense industry, but to date, The President’s goal of stability in Iraq is still in place and that shouldn’t be discounted when looking at shares of this group,” said Richard Tortoriello, aerospace & defense analyst, Standard & Poor’s Equity Research Services.
For the aerospace industry, Tortoriello expects the commercial and business jet markets to remain strong, fueled by economic growth globally, and forecasts a return to growth for the regional jet market, as the health of U.S. carriers improves.