Australia Ammunition Market 2025 | Projected to reach USD 674.6 Million by 2033

Market Overview

The Australia ammunition market size was USD 415.4 Million in 2024 and is projected to reach USD 674.6 Million by 2033, growing at a CAGR of 5.12% during the forecast period of 2025-2033. Growth is primarily driven by increased defense spending focused on missile and artillery systems amid geopolitical tensions, such as issues with China, and strategic alliances like the Aukus pact with the US and UK. The modernization of the armed forces is also a significant contributor to market expansion.

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How AI is Reshaping the Future of Australia Ammunition Market

• AI technologies are enhancing guided missile systems, improving precision and operational efficiency as Australia invests billions in defense tech upgrades.

• The integration of AI in manufacturing is streamlining production at new defense factories, including those for Guided Multiple Launch Rocket Systems and artillery ammunition.

• AI-driven analytics support strategic defense collaborations, such as the Aukus agreement, by developing interoperable ammunition systems aligned with global standards.

• Advanced AI-based supply chain optimization is fortifying local munition production, ensuring stable supply and timely procurement.

• AI applications enable improved defensive and offensive ammunition development, responding dynamically to geopolitical security needs in the Indo-Pacific region.

• Companies like Thales Australia are leveraging AI to strengthen their roles in national defense plans, enhancing stockpile management and missile procurement.

Market Growth Factors

Australia's ammunition market growth is significantly influenced by increased defense spending focused heavily on missile and artillery systems. The government is dedicating substantial financial resources, including a $21 billion investment under the Guided Weapons and Explosive Ordnance (GWEO) Enterprise, to develop advanced guided missile systems and domestic ammunition manufacturing. This substantial capital injection aims at modernizing defense infrastructure with a view to ensuring military preparedness and national security, driving demand for specialized, high-quality ammunition products ranging from small arms to large-caliber artillery.

Geopolitical tension in the Indo-Pacific region, particularly concerning China's military assertiveness, is a critical driver of market growth. The shifting security landscape compels Australia to enhance its defense capabilities, leading to increased demand for both defensive and offensive ammunition. The proactive national security strategy prioritizes missile defense and the development of advanced weaponry, heightening the need for specialized ammunition. Such geopolitical factors necessitate a robust defense posture including procurement of high volumes of ammunition and advanced munitions development.

Australia's strategic alliances and military collaborations, especially through the Aukus pact with the US and UK, significantly influence ammunition market expansion. These partnerships emphasize interoperability and military cooperation which requires supply of ammunition conforming to international standards. Defense technology collaborations in missile systems and naval operations further fuel the demand for technologically sophisticated ammunition. Such transnational defense engagements ensure that Australia's armed forces remain well-equipped for modern warfare scenarios, boosting market demand for highly specialized ammunition systems.

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Market Segmentation

Product Insights:

• Bullets

• Aerial Bombs

• Grenades

• Mortars

• Artillery Shells

• Others

Caliber Insights:

• Small

• Medium

• Large

Guidance Insights:

• Guided

• Non-Guided

Lethality Insights:

• Less-Lethal

• Lethal

Application Insights:

• Defense

o Military

o Homeland Security

• Civil and Commercial

o Sporting

o Hunting

o Self-Defense

o Others

Regional Insights:

• Australia Capital Territory & New South Wales

• Victoria & Tasmania

• Queensland

• Northern Territory & Southern Australia

• Western Australia

Key Players

• Thales Australia

Recent Development & News

• November 2024: The Australian government selected Thales Australia as a key partner in the new Australian Guided Weapons and Explosive Ordnance Plan, enhancing local munition production, supply chain resilience, and accelerating long-range missile procurement over the next decade.

• March 2025: The Albanese government signed two agreements of understanding facilitating the domestic production of missiles, including the co-production and assembly of Guided Multiple Launch Rocket Systems (GMLRS) in Australia.

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