Defence group BAE Systems has issued a warning that the protracted US government shutdown, the longest in history, could potentially delay contract funding and payments if it remains unresolved.
Europe's leading defence contractor stated that while the extended shutdown has not yet had any "material" effects on its US operations, there could be repercussions on contracts before the year ends.
The company said: "We are encouraged by the momentum in Congress to end the US government shutdown, especially the positive actions of this week.
"To date, we do not see material effects on our US business.
"If the shutdown persists, delays to contract funding and timing of payments before year-end are possible."
There is optimism that the US government shutdown may be nearing its end, with a spending bill finally approved by the US senate in a move that could bring closure.
However, the matter now shifts to the House of Representatives, with the lower chamber of Congress anticipated to vote on the funding measure this week.
The six-week shutdown has already inflicted significant damage on the US economy, with approximately 1.25 million federal employees missing at least one or two salary payments, thousands of flights cancelled, and government contract awards decelerated.
The Congressional Budget Office estimates that a six-week shutdown will diminish US economic growth in the fourth quarter by roughly 1.5 percentage points.
This would result in growth being halved from the third quarter.
Whilst the reopening is expected to bolster first-quarter growth next year by 2.2 percentage points, forecasts suggest approximately $11bn US dollars (£8.4bn) in American economic activity will be permanently lost.
BAE Systems – which manufactures weaponry including missiles and artillery systems, tanks, aircraft and warships – maintains a substantial presence in the US, its largest geographical market, where sales soared by 17% to £12.5bn last year.
On Wednesday, the company said: "In the US, the president recently voiced support for the trilateral Aukus programme and momentum has continued to build around the architecture of the Golden Dome air and missile defence initiative, to which our technologies and capabilities are well aligned."
Aukus represents a multi-billion US dollar submarine agreement between longstanding allies – Australia, the º£½ÇÊÓƵ and the US.
BAE revealed it had secured more than £27bn worth of orders thus far in 2025, with the second half aligning with its projections. The firm added that Norway's recent announcement regarding its intention to purchase Type 26 anti-submarine frigates was anticipated to generate a "substantial order", which would be recorded after 2025.
BAE confirmed it remained on track with July's enhanced full-year guidance, with the company positioned to grow sales by between 8% and 10% and underlying earnings by between 9% and 11%.
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