Deloitte report: U.S. foreign military sales declined in 2016

By Marjorie Censer / May 23, 2017 at 10:24 AM

A new Deloitte report found that the U.S. foreign military sales program more than doubled from 2010 to 2015 -- but declined in 2016.

According to the report, released today, foreign military sales grew to $46 billion in 2015, up from $21 billion in 2010. But in 2016, FMS sales declined by about $13 billion.

However, the Deloitte study notes that pending deals announced in 2016 will likely be counted in the next fiscal year.

"As a result, 2017 is anticipated to be a significant growth year for U.S. FMS, driven by helicopter, missile, and other military sales to the Middle East, which have already been cleared by the U.S. State Department," the document states, adding: "In 2017, U.S. fighter manufacturers are likely to sell approximately $36 billion only in military aircraft, with recent announcements including the sale of F-16s to Bahrain, F-15s to Qatar and F/A-18s to Kuwait."

Robin Lineberger of Deloitte told Inside Defense earlier this month that FMS tends to be lumpy because each deal is counted when the Pentagon or State Department determines it has closed, not necessarily when the company records the revenue or delivers the equipment. "It's the way we keep score," he said.

The report also found that the U.S. aerospace and defense sector employed 4.1 million workers directly and indirectly in 2016. Though revenues in the sector have increased over the last five years, that figure is down by nearly 345,000 over the same period, according to the study.

"Much of this decline was in the defense subsector and was likely due to the effects of the Budget Control Act of 2011, the ongoing efforts to replace labor with process automation and robotics, and internal efficiency initiatives," it adds.

Read the full report here.

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