The value and number of merger and acquisitions in the global aerospace and defense industry in the first half of 2020 is down significantly versus a year ago coinciding with the spread of the coronavirus pandemic, according to the global consulting firm PwC.

The new year had a “promising start” with seven of the 10 deals completed before social distancing went into effect in the U.S. and Europe, PwC says in Global aerospace and defense deals insights: Mid-year 2020. After that, there was a “precipitous drop in activity,” it says.

Through June, there were $15.4 billion in announced deals, 78 percent less than a year ago and 34 percent lower than the 10-year average. The top 10 deals accounted for $12.6 billion of the total.

Deal volume in the first half of 2020 declined by 17 percent to 186 deals versus 225 in the same period last year. However, the 186 deals represent a 14 percent increase over the 10-year average.

PwC believes that the trend toward fewer deals will continue.

“There can be no question that commercial players are facing a long recovery period involving major changes to their businesses, as well as those that support them,” PwC says in a brief outlook note. “Operating models have already adjusted and will continue to do so as companies focus relentlessly on liquidity and, in some cases, their very survival.”

Even in the defense space, where PwC says the outlook “is a somewhat brighter picture” due to budgets holding and international demand, “we believe the concern facing defense players is one of a broader overall uncertainty in the markets and the path of the pandemic. Regardless of perceived strategic fit and value, buyers will no doubt be exercising the highest levels of caution as they approach assets.”

PwC breaks out the deals in six areas, with Arms & Vehicles accounting for 39 percent of the value in the first half of the year followed by Aircraft & Parts, Electronic Equipment and lastly Software & Security Systems. The analysis doesn’t show any deal activity for Raw Materials & Supplies, and Supporting Services.