Europe Aerospace and Defense Market Size

Europe Aerospace and Defense Market Analysis

• The Europe aerospace and defense market is anticipated to register a CAGR of over 2.4% during the forecast period.
• Due to the COVID-19 pandemic, most countries imposed restrictions on the import and export of goods. The ongoing war between Ukraine and Russia also contributed to keeping tight control on imports and exports. However, the pandemic has hampered the economic conditions of the aerospace industry in Europe and had a moderate impact on the defense sector. The pandemic led to difficulties for manufacturers in obtaining raw materials required for the production of defense products. Conversely, the decline in pandemic levels led to growth in both the aerospace and defense industries in Europe. Additionally, manufacturers in both sectors witnessed growth due to an increase in end-product production. Therefore, it is likely that the aerospace and defense market in the European region will experience growth during the forecast period.
• The growth of the aerospace and defense industry in Europe can be attributed to rising demand for commercial and military aircraft, along with a substantial increase in defense spending. The presence of leading industry incumbents, such as BAE Systems, Rolls Royce, Safran, Thales, and Leonardo, has bolstered indigenous R&D and extensive manufacturing.
• Total military spending in Europe amounted to USD 418 billion in 2021, 3.0% higher than in 2020 and 19% higher than in 2012. Central and Western Europe, two subregions that together include most NATO allies and all European Union member states, had aggregated military spending totaling USD 342 billion last year (USD 305 billion for Western Europe and USD 36.6 billion for Central Europe). The combined military expenditure of these subregions increased by 3.1% in 2021, with military spending in Western Europe growing at a higher rate (3.4%) than in Central Europe (1.3%). Increased expenditure on arms procurement and military R&D mostly drove the growth in military spending in Central and Western Europe.
• The aerospace and defense industry in Europe is closely related to the GDP of the region, and industry players work in close collaboration with regional suppliers and end-users to foster symbiotic sustenance. The European Union (EU) has also formulated the Europe 2020 Strategy for smart, sustainable, and inclusive growth. The European space program contributes to regional scientific progress in the fields of telecommunications, navigation, and Earth observation.