Press release
The US Defense Industry: Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017
The US Defense Industry
London, September 18th, 2012 – With the US defense budget for 2012 valued at US$645.7 billion, the nation has the largest defense market in the world. Due to its high levels of military spending, a large number of opportunities are available to companies keen to supply the nation with defense equipment. However, the US defense budget, which declined at a CAGR of -0.77% during the review period, is expected to record a CAGR of -0.12% over the forecast period, largely due to the financial constraints caused by the global financial crisis.
Threats from North Korea and Iran, modernization initiatives, an arms race with China and Russia, ongoing military operations, and the protection of allies are expected to drive the defense spending of the US. The US perceives a potential nuclear threat from Iran and North Korea, through their acquisition of long-range ballistic missiles. The tension between the US and North Korea further increased in November 2010, when the US criticized the attacks carried out by North Korea on South Korea.
The US must modernize its aging fleet of equipment, such as fighter aircraft, helicopters, land defense systems, and maritime equipment; however, the rising unit cost of defense systems poses a challenge to procurement funding. The cost of military hardware is increasing due to technological advancements and a shortage of skilled labor in the design, engineering, and manufacturing sectors, coupled with the rising cost of input materials, such as metal. In addition, the per-unit overhead costs at production facilities increased due to a reduction in the number of units manufactured.
The US defense budget declined at a CAGR of -0.77% during the review period, to reach a value of US$645.7 billion in 2012. However, defense expenditure is expected to register a marginal decline of -0.12% in CAGR over the forecast period, declining to US$611.0 billion by 2017. Indeed, the government has announced defense budget cuts over the next five years, which will be achieved by reducing capital expenditure.
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Strategic Defence Intelligence's unique monitoring platform tracks global defence activity for over 2,500 companies and 65 product categories in real time and in a highly structured manner, giving a comprehensive and easily-searchable picture of all defence industry activity. The site features: daily updated analysis, comment and news, company and customer profiles, defence spending, tenders and contracts, product and technology intelligence, a research and analysis database providing access to industry and competitor reports to enable business and market planning, and fully customizable tools, including instant personalized report generation and custom alerts.
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For more than a decade GlobalDefence.net provides information from the field of foreign and security policy. It all started in the year 2001. After 911 the founder and current editor in chief Holger Paletschek started to create a German-speaking website with an overview about the armed forces of the world.
Today GlobalDefence.net stands for current news, background articles, geopolitical analyses, network of experts, industry leaders, political decision makers, as well as information about the armed forces of the world provided in German and English.
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