NATO Defense Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The NATO defense market is segmented by type (personnel training and protection, communication systems, weapons and ammunition, and vehicles) and country (the United States, United Kingdom, Canada, Turkey, Italy, Germany, France, Poland, Spain, Belgium, and the Rest of the NATO Countries). The market sizing and forecasts have been provided in value (USD billion) for all the above segments.

NATO Defense Market Size

NATO Defense Market Summary
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Study Period 2018 - 2028
Base Year For Estimation 2022
Forecast Data Period 2023 - 2028
Historical Data Period 2018 - 2021
CAGR > 3.00 %
Market Concentration Medium

Major Players

NATO Defense Market Major Players

*Disclaimer: Major Players sorted in no particular order


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NATO Defense Market Analysis

The NATO defense market is anticipated to register a CAGR of over 6% during the forecast period.

Due to COVID-19, several NATO nations were severely impacted economically and faced supply chain disruptions. Since the ramifications of such a situation for the defense sector could be catastrophic, the governments of the NATO nations mitigated the impact on the defense sector at an early phase. Thus, to defend political and defense interests, NATO member states acted collaboratively and aggressively. A progressive and strategic increase in the defense budget and the launch of infantry support projects are expected to create demand for sophisticated new-generation weapon systems with advanced capabilities, thereby driving the market into focus during the forecast period.

The rise in defense spending and modernization programs undertaken by military forces in major economies are driving the growth of the market. Various economic, legal, and political regulations affect the procurement of new military systems and are expected to hamper the growth of the market. The Russian-Ukraine war has impacted the defense spending by the NATO countries. Most European countries have increased their defense spending due to Russia's invasion. Germany has increased its defense spending above 2% of GDP and allocated 109 billion euros, which is more than the total defense budget for 2021. Factors such as these are fueling the growth of the NATO defense market.

NATO Defense Market Trends

Weapons and Ammunition Segment to Showcase Significant Growth During the Forecast Period

During the forecast period, the market for weapons and ammunition is expected to grow a lot. The need to maintain a sufficient inventory of ammunition with the militaries worldwide and the increasing demand for training ammunition are anticipated to have a positive impact on the NATO defense market. In addition, NATO forces have been involved in peacekeeping missions and counter-insurgency operations that require a continuous supply of ammunition to continue their operations.

Several NATO countries are focusing on augmenting their military firepower and defensive capabilities in the wake of the growing threats from other nations and the increasing deployment of NATO forces to fight insurgent groups in various countries around the world. Furthermore, rising procurement of small ammunition and growing expenditure on enhancing defense capabilities drive segment growth. For instance, in February 2022, Finland's government decided to supply weapons and ammunition to Ukraine due to the Russian invasion. The country supplied 1500 rocket launchers, 2500 assault rifles, 150,000 rounds of ammunition, and other defense equipment. Also, in September 2021, the United States Army signed a small arms contract worth USD 13 million with Winchester Ammunition for the development of manufacturing processes for the 7.62 mm cartridge at the company's Lake City Army Ammunition Plant.

NATO Defense Market - Combined Defense Expenditure By NATO Countries, 2018-2022 (USD Billion)

The US is Expected to Dominate the Market During the Forecast Period

The United States will continue to dominate the market during the forecast period. With a defense budget of USD 801 billion in 2021, the United States was expected to be the world's largest defense spender. Increased defense spending and rising expenditures on advanced weapons and ammunition procurement drove market growth across the country. In the fiscal year 2023 defense budget, the US Department of Defense (DoD) has requested USD 24.7 billion for missiles and munitions. The US DoD requested USD 5.2 billion for conventional ammunition, which includes bullets, cartridges, mortars, explosives, and artillery projectiles used primarily by ground forces.

Because Russia invaded Ukraine, the US government decided to send USD 400 million worth of weapons and generators to Ukraine in November 2022. Also in February 2023, the US Army said it had given USD 522 million to Northrop Grumman Corporation and Global Military Products Inc. to make 155 mm artillery rounds for Ukraine. In addition, in January 2023, Federal Ammunition signed a USD 13.8 million contract with the US Army for the supply of 5.56 NATO Mk311 Frangible Ammunition. Thus, increased spending on advanced weapons and ammunition drives market growth in the United States during the forecast period.

NATO Defense Market - Military Expenditure, United States (USD Billion), 2018-2021

NATO Defense Industry Overview

The NATO defense market is fragmented, with the presence of several manufacturers supplying a wide range of defense equipment to various armed forces present in the 30 NATO countries . Some of the prominent players in the market are Lockheed Martin Corporation, Northrop Grumman Corporation, General Dynamics Corporation, BAE Systems plc, and THALES. Players can make use of the rising opportunities from countries like Romania, Bulgaria, and Poland, as these countries increased their defense spending and are planning for huge-scale modernization programs for their military infrastructure. As militaries focus on procuring state-of-the-art defense equipment to gain a competitive edge on the battlefield, the focus on R&D to facilitate product innovations will help the defense contractors gain new customers, thereby strengthening their geographical presence and market share. Furthermore, the key players are heavily investing in research and development and providing enhanced munitions to defense forces.

Safety and regulation rules in the defense sector are expected to make it hard for new players to join. Furthermore, since a contract for developing a precision munition requires high technological expertise and spans several years, careful identification and continuous monitoring of associative risks are required to be undertaken to assess their effects on the operational parameters of the manufacturing company.

NATO Defense Market Leaders

  1. Lockheed Martin Corporation

  2. Northrop Grumman Corporation

  3. General Dynamics Corporation

  4. BAE Systems plc


*Disclaimer: Major Players sorted in no particular order

NATO Defense Market Concentration

NATO Defense Market News

  • January 2023: The Italian armed forces awarded a contract to Elbit Systems Ltd., Rheinmetall AG, and Nexter Group for the supply of 120 mm ammunition for the Ariete army battle tank. The total value of the contract was EUR 18.7 million.
  • December 2022: The German Bundeswehr signed an agreement with Rheinmetall AG to supply over 600,000 rounds of medium-caliber ammunition for the Puma infantry fighting vehicle. The value of the agreement was EUR 576 million.

NATO Defense Market Report - Table of Contents


    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study




    1. 4.1 Market Overview

    2. 4.2 Market Drivers

    3. 4.3 Market Restraints

    4. 4.4 Porter's Five Forces Analysis

      1. 4.4.1 Bargaining Power of Buyers/Consumers

      2. 4.4.2 Bargaining Power of Suppliers

      3. 4.4.3 Threat of New Entrants

      4. 4.4.4 Threat of Substitute Products

      5. 4.4.5 Intensity of Competitive Rivalry


    1. 5.1 Type

      1. 5.1.1 Personnel Training and Protection

      2. 5.1.2 Communication Systems

      3. 5.1.3 Weapons and Ammunition

      4. 5.1.4 Vehicles

    2. 5.2 Country

      1. 5.2.1 United States

      2. 5.2.2 United Kingdom

      3. 5.2.3 Canada

      4. 5.2.4 Turkey

      5. 5.2.5 Italy

      6. 5.2.6 Germany

      7. 5.2.7 France

      8. 5.2.8 Poland

      9. 5.2.9 Spain

      10. 5.2.10 Belgium

      11. 5.2.11 Rest of NATO Countries


    1. 6.1 Company Profiles

      1. 6.1.1 Rheinmetall AG

      2. 6.1.2 BAE Systems plc

      3. 6.1.3 THALES

      4. 6.1.4 L3Harris Technologies Inc.

      5. 6.1.5 ASELSAN A.Ş

      6. 6.1.6 Raytheon Technologies Corporation

      7. 6.1.7 Airbus SE

      8. 6.1.8 Lockheed Martin Corporation

      9. 6.1.9 Northrop Grumman Corporation

      10. 6.1.10 General Dynamics Corporation

      11. 6.1.11 The Boeing Company

      12. 6.1.12 Textron Inc.

      13. 6.1.13 Leonardo S.p.A

      14. 6.1.14 Elbit Systems Ltd.

      15. 6.1.15 Turkish Aerospace Industries


NATO Defense Industry Segmentation

The North Atlantic Treaty Organization (NATO), also called the North Atlantic Alliance, is an intergovernmental military alliance between 28 European and 2 North American countries. The organization implements the North Atlantic Treaty that was signed on April 4, 1949. NATO's essential and enduring purpose is to safeguard the freedom and security of all its members by political and military means.

The NATO defense market is segmented by type and country. By type, the market is segmented into personnel training and protection, communication systems, weapons and ammunition, and vehicles. By country, the market is segmented into the United States, United Kingdom, Canada, Turkey, Italy, Germany, France, Poland, Spain, Belgium, and the rest of the NATO countries. The market sizing and forecasts have been provided in value (USD billion) for all the above segments.

Personnel Training and Protection
Communication Systems
Weapons and Ammunition
United States
United Kingdom
Rest of NATO Countries

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NATO Defense Market Research FAQs

The NATO Defense Market is projected to register a CAGR of greater than 3% during the forecast period (2023-2028).

Lockheed Martin Corporation, Northrop Grumman Corporation, General Dynamics Corporation, BAE Systems plc and THALES are the major companies operating in the NATO Defense Market.

NATO Defense Industry Report

Statistics for the 2023 NATO Defense market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. NATO Defense analysis includes a market forecast outlook to for 2023 to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.

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