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October 12, 2020updated 15 Oct 2020 4:18pm

COVID-19 to impact military procurement programmes in 2020-2021, finds Poll

Military procurement programmes will be affected due to COVID-19, opined majority of the respondents to a poll that Verdict has conducted to assess the pandemic’s impact.

Military procurement programmes will be affected due to COVID-19, opined majority of the respondents to a poll that Verdict has conducted to assess the pandemic’s impact.

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The impact will be significant, according to 47% of the respondents, while 26% of the respondents expect a normal impact. The remaining 27% of the respondents foresee no impact on procurement programmes due to the impact.

Military procurement programmes

The analysis is based on 375 responses received from the readers of Verdict’s defence sites Airforce Technology, Army Technology and Naval Technology between 26 July and 29 September 2020.

COVID-19 impact on military procurement programmes

COVID-19 has resulted in most economies shifting their focus to public health and containment. The World Bank has forecast that the global economy is projected to shrink by 5.2% in 2020 due to the COVID-19 pandemic.

The negative growth is expected to invariably affect defence expenditure too. Russia, India, South Korea and Thailand are among the few countries that have either paused or reduced defence expenditure as they grapple with an economic slowdown.

Procurement programmes in the near-term are expected to be affected due to the challenges posed by the pandemic for defence companies, such as cash flow and supply chain disruptions. In the long-term, procurement budgets may need to prioritise expenditure on specific programmes. For example, the pandemic may impact the modernisation plans of NATO even though the organisation has urged members to maintain expenditure of 2% of GDP on defence.

Countries such as the US have taken a different approach to defence expenditure by focusing on investing in the defence units of aerospace companies that are currently suffering due to the pandemic. Such an approach can help in regenerating economic activity, while ensuring stability.

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Build resilience in the face of COVID-19 disruption

COVID-19 has already affected our lives forever. The way we work, shop, eat, seek medical advice, and socialize will all be different in the future. Quite how different remains to be seen, but all industries must plan for multiple eventualities. Are you interested in actionable insights on the business challenges induced by the pandemic? GlobalData's cross-sector report analyzes the significance of this major disruptive theme across industry verticals. It provides side-by-side research of alternative datasets to present you with unique quantitative analysis of the effects of COVID-19 and how these differ across sectors. Additionally, it offers qualitative analysis of each sector and analyzes COVID-19’s impact on leading companies. Whatever your company’s imminent strategic plans, the long-lasting impact of COVID-19 must not be overlooked. Find out how to futureproof your business operations – download our report today.
by GlobalData
Enter your details here to receive your free Report.

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