US Precision-Guided Munitions Market to Surpass US$ 9.82 Billion by 2031, Backed by Defense Modernization Programs (5.85% CAGR) | Lockheed Martin Corporation, Raytheon Technologies Corporation, Northrop Grumman Corporation

The US Precision-Guided Munitions (PGMs) market is witnessing robust growth, with revenues reaching US$ 6.23 billion in 2023 and expected to rise to US$ 9.82 billion by 2031, reflecting a steady CAGR of 5.85% during the forecast period 2024-2031.

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Market Overview

PGMs are advanced weapons systems designed to achieve high targeting accuracy, minimizing collateral damage and enhancing operational effectiveness. These munitions employ sophisticated guidance technologies such as inertial navigation, GPS, laser, infrared, electro-optical, and radar seekers, enabling dynamic mid-flight course corrections. The US military extensively utilizes PGMs across air, ground, and naval platforms, underscoring their strategic importance in modern warfare.

Market Segmentation and Key Technologies

• Type: Includes air-launched munitions (e.g., JDAM, Paveway series), ground-launched rockets and missiles (e.g., GMLRS, ATACMS, Precision Strike Missile), as well as naval munitions (e.g., Tomahawk cruise missiles, SM-6, NSM).
• Guidance Systems: GPS-guided munitions dominate, with laser-guided and combined guidance systems enhancing performance in complex operational environments.
• Platform: PGMs are deployed from a range of platforms including UAVs, ground vehicles, naval ships, and submarines.
• End-User: Primarily military branches including the Army, Air Force, Navy, and other defense sectors.
• Application: Anti-air, anti-ship, anti-tank, surface-to-surface strikes, and training simulations.

Market Drivers
• Enhanced Precision and Operational Efficiency: Continued development of low-cost, high-accuracy PGMs like the Rapid Adaptable Affordable Cruise Missile (RAACM) addresses budget constraints while improving battlefield capabilities.
• Strategic Defense Investments: US Department of Defense's substantial procurement budgets, including $315 billion in FY 2024 with significant allocations for missile systems and modernization, drive market expansion.
• Technological Innovation: Advances in guidance systems, stealth capabilities, and integration with networked warfare platforms reinforce the demand for PGMs.

Challenges

• High Procurement and Development Costs: Advanced technologies and complex manufacturing processes contribute to significant capital expenditures, limiting rapid adoption among smaller defense programs.
• Regulatory and Compliance Complexities: Stringent acquisition processes, export controls, and international treaties shape the competitive landscape and product deployment.
• Supply Chain and Economic Risks: Geopolitical tensions and economic fluctuations impact procurement plans and technology investments.

Competitive Landscape

Key players include Lockheed Martin, Raytheon Technologies, Northrop Grumman, General Dynamics, BAE Systems, L3Harris Technologies, Textron, AeroVironment, and others. These companies pursue product innovation, strategic partnerships, and large-scale procurement contracts to maintain market leadership.

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United States: Recent Industry Developments

✅ In August 2025, Raytheon secured a $1.2 billion U.S. Department of Defense contract to supply advanced precision-guided munitions. The agreement includes the latest variants of the GBU-53/B StormBreaker, enhancing all-weather strike capabilities.

✅ In July 2025, Lockheed Martin completed successful testing of its Extended-Range Guided Multiple Launch Rocket System (ER GMLRS) at White Sands Missile Range, New Mexico. The system demonstrated extended precision targeting beyond 150 km.

✅ In June 2025, Northrop Grumman announced a $500 million investment to expand its precision weapons manufacturing facility in West Virginia. The expansion will accelerate production of next-generation PGMs to meet rising U.S. and allied demand.

✅ In May 2025, Boeing delivered the first batch of upgraded Joint Direct Attack Munition-Extended Range (JDAM-ER) kits to the U.S. Air Force. The kits improve standoff strike capability while lowering overall mission costs.

✅ In April 2025, General Dynamics Ordnance and Tactical Systems partnered with the U.S. Army to develop AI-enhanced guidance systems for artillery munitions. The program aims to improve target discrimination and reduce collateral damage in urban operations.

Recent Developments

• Expansion of multiyear procurement programs incorporating economic order quantities for efficiency.
• Introduction of novel munitions such as the lightweight Long Range Anti-Ship Missile (LRASM) and improved training rounds enhancing affordability.
• Significant investments in guidance technology enhancements to counter emerging threats and operational challenges.

Conclusion

The US PGMs market remains vital to national security and technological supremacy, driven by continuous modernization, expanding tactical needs, and evolving warfare dynamics. Despite fiscal and regulatory challenges, sustained investment and innovation position the sector for steady growth and global influence in advanced weapons systems
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