Please advance to Slide 15. On this slide, we show our trend of consolidated gross margin for 2022 and 2023, along with the performance expected for 2024. 2023 is expected to approximate the prior year as the impact of negative peso — of the negative peso-to-dollar exchange rate more than offset the positive impact of higher volumes on production efficiencies, favorable mix, material savings on certain programs and the positive impact of our continuous improvement initiatives. As noted in the 2023 pro forma bar on the graph, our gross margin would have been 14.4% or 90 basis points higher, had it not been subject to the full year estimate of $1.9 million with the unfavorable peso-to-dollar exchange rate impact. With our 2024 outlook for a revenue increase of 15% to 20% and a more limited impact of the peso-to-dollar exchange rate, our 2024 gross margin outlook is 14.8% on higher volumes at the expected mix.
We will strive to continuously improve manufacturing output and productivity while maintaining excellent quality. We will also continue our efforts to diversify our markets served and our customer base and to deliver more value-added services to our customers which we believe can provide further upside to our current margin levels. Please advance to Slide 16 for a quick summary of our comments. Key highlights for the quarter and year-to-date include the continued strong backlog position and a significant increase in gross profit both for the third quarter and the year-to-date periods despite the unfavorable impact of the Mexican peso relative to the U.S. dollar. We expect rapid growth in Sypris Electronics defense market, supplemented by additional funding to meet the defense needs of our allies.
This market will likely exceed $1 trillion for the fiscal year 2024. We also expect significant growth in its communications and space markets. The outlook for Sypris Technologies remains positive, though the current forecast for commercial vehicles in 2024 is for a year-over-year decline of 13.4%. That decline is expected to be offset by planned increases in new programs with existing commercial and other vehicle customers and currently strong demands for its energy products for use in the rapidly growing LNG export markets, among others. Sypris Technologies, in addition to expanding its energy product line to include pig signalers, augmenting its distribution resources to expand its energy products presence in Europe, Asia, the Middle East and Mexico, has booked its first order for insulated joints in a water line expansion application.
Based on our strong backlog, growing new business funnel and growing market potential, we offer our initial guidance for 2024 at 15% to 20% growth in revenue, 25% to 30% growth in gross profit and 150 [ph] to 200 basis point increase in gross margin. We look forward to the opportunity to continue the positive momentum of growth and continuous improvement in 2023 into a bigger and more profitable 2024. Thank you for your continued support and interest in our business. Now, I’d like to turn it over to Jeff for closing remarks.
Jeffrey Gill: Thank you, Rich and thank you for joining us on this call this morning. We are looking forward to another year of double-digit growth, expanding margins and increased profitability. And please know, we appreciate your continued interest in our business. Thank you and have a good day.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
End of Q&A:
