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Aerospace and defense suppliers are facing increased financial stress driven by growing demand for weapons systems and critical defense capabilities as Middle East disruptions from the Iran War continue, according to a white paper by financial health data and analytics firm RapidRatings.
The U.S. military’s rapid scaling has placed increased pressure on domestic suppliers as they work to maintain operational readiness with the resources, materials and finances required to meet the demand. At the same time, the Strait of Hormuz blockage has contributed to rising costs and created a volatile energy market.
RapidRatings conducted a stress test on 3,112 public and 1,197 private aerospace and defense suppliers across 30 manufacturing industries, including aerospace, semiconductors and other electronic components, computer systems design and related services, and bolts.
The stress test resulted in high and very high risk rising from 17.6% to 20.3%, a 2.7-percentage-point deterioration across all aerospace and defense suppliers, according to the white paper.
