US debt crisis hurts UK defence firms

jpns-19-08-17 retro Aug 2017

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A SEGENSWORTH-based defence firm has become the latest British company to issue a warning about the fallout from America’s debt crisis.

Chemring, which makes heavy munitions and bomb detectors, said orders from the US military have been hurt by the government shutdown, following a warning from defence giant BAE Systems.

Chemring’s shares slumped by almost a quarter on Friday following a profit warning, while BAE was down two per cent.

Wrangling over raising the country’s debt ceiling has closed many parts of the US government, with thousands of workers locked out.

Chemring said orders and deliveries to the US Department of Defense this month have been hurt by the temporary closure, after government inspectors were sent home.

It also said ‘continuing difficult market conditions’ mean 2014 performance ‘is likely to be less than the anticipated current year out-turn’.

Its warning follows jet and shipbuilder BAE Systems –which has its maritime arm based at the dockyard in Portsmouth – saying that a prolonged shutdown will hurt its business.