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The US defense market is projected to register a CAGR of more than 0.5% during the forecast period (2022-2031).
The COVID-19 pandemic impacted the country's economy seriously. It is estimated that the economy is contracting by approximately 3.5% in 2020, due to the closing of various businesses like restaurants and airlines. In 2021, the economy of the country grew considerably compared to 2020 and witness further witness a moderate growth rate in 2022. Despite, the impact of the pandemic on the economy, the country continued to increase its defense spending in 2020 with a focus on research and development, and implementation of several long-term projects.
In the United States, military spending has been considered to be the second-largest allocation in the federal budget, after social security. The country's spending on its defense is greater than that of the cumulative defense spending of countries like China, Saudi Arabia, Russia, the United Kingdom, India, France, Japan, Germany, and South Korea. In 2020, the US defense spending was USD 778 billion.
The current ongoing political tensions with China and Russia and planned procurements of advanced military equipment to replace the aging equipment currently in service are expected to accelerate the growth of the market.
Additionally, the fight against terrorism, externally and internally, is also expected to support the growth of the defense market in the United States.
The growing investments in the development of advanced technologies, like additive manufacturing technology for applications like body armor, directed energy weapons, and artificial technologies, among others, to support the armed forces are expected to provide future growth opportunities.
Scope of the Report
The study covers all aspects and provides insights into the budget allocation and spending in the US defense market in the past and the present, along with the forecast for the future. The market includes details about the procurement and modernization plans of the US Armed Forces. Based on Armed Forces, the market is segmented into Army, Navy, and Air Force. Based on Type, the market is segmented into Fixed-wing Aircraft, Rotorcraft, Ground Vehicles, Naval Vessels, C4ISR, Weapons and Ammunition, Protection and Training Equipment, and Unmanned Systems. The market also includes investments into the development and launch of satellites and research and development of advanced technologies like directed energy weapons, the use of composites, and advanced manufacturing technologies like 3D printing. The market sizing and forecasts have been provided in value (USD billion).
|Weapons and Ammunition|
|Protection and Training Equipment|
Key Market Trends
The Air Force Segment is Expected to Register the Highest Growth Rate During the Forecast Period
The air force segment is expected to experience major growth in the US defense market during the forecast period, owing to various procurement plans for replacing aging combat aircraft, as well as procurement plans for new unmanned aerial vehicles. In FY 2022, the US Air Force requested USD 50.45 billion for the research and development of new technology. The increase in the amount may lead to funding for the next-generation fighter jets of the US Air Force. The United States Air Force plans to invest in the acquisition of 48 F-35 Joint Strike Fighters, 14 KC-46ATanker, 14 HH-60W Combat Rescue Helicopters, 12 F-15EX, 3 MC-130J Commando II aircraft. The report by the Center for Strategic and Budgetary Assessments (CSBA) in 2018 (which was approved by the US Congress) stated that the US Air Force required 386 operational aircraft. According to the study, there were shortfalls in the tanker, bomber, fighter, strike/reconnaissance drones, and command-and-control/intelligence, surveillance, and reconnaissance inventories. The study further revealed that the Air Force required 14 bomber squadrons, 62 fighter squadrons, 54 tanker squadrons, 27 strikes/reconnaissance drone squadrons, and 62 C2/ISR squadrons by 2030. Such robust fleet modernization plans, as well as investments into R&D developments, will propel the growth of the segment at a high CAGR during the forecast period.
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The US Defense Market is Expected to Experience a Steady Growth in the Next Few Years
In 2020, US military spending grew by 4.4%, reaching USD 778 billion from USD 734 billion in 2019. The United States has the highest military spending in the world, and it accounted for 39% of the total global defense spending in 2019. For FY 2022, the US defense budget was USD 715 billion to improve military readiness and invest in the modernization of armed forces. The DoD (Department of Defense) plans to invest in military modernization, as well as technologies like artificial intelligence, hypersonic missile technology, 5G communication, and quantum computing, among others. The US armed forces currently have a fleet of more than 13,200 military aircraft, over 45,000 armed vehicles, and over 450 naval vessels in service. To enhance its military technologies, the country is investing heavily in the research and development of artificial intelligence (AI). The armed forces are integrating AI for ISR applications, command and control applications, enhancement of autonomy, and improvement of the lethality of weapon stations, among others. Various ongoing developments are expected to propel the growth of the US defense market during the forecast period.
There are several players in the market that support the defense market of the United States. However, Lockheed Martin Corporation, The Boeing Company, Raytheon Technologies Corporation, General Dynamics Corporation, and Northrop Grumman Corporation are some of the prominent players in the US defense market, which are expected to hold a significant share. Various initiatives and product innovations are done by companies to strengthen their presence in the market. In this regard, as of May 2021, FLIR Systems Inc. was awarded a contract worth over USD 70 million from the US Armed Services for about 600 FLIR Centaur robots and related equipment. The ground robots will be delivered to US Army, Navy, Air Force, and Marine Corps. The delivery of unmanned ground vehicles was planned to begin in the third quarter of 2021. The provision of long-term contracts for the development of new military equipment and technologies is anticipated to propel the revenues of various companies in the United States. For instance, in March 2021, Lockheed Martin Corporation was awarded multiple contracts worth more than USD 125 million to deliver 9 UH-60M and 21 HH-60M helicopters to the US Army. The delivery of the helicopters was planned to be completed in June 2023. Such contracts are expected to help the companies increase their share in the market.
- In June 2021, the US Army awarded a USD 942.9 million contract to Oshkosh Defense to integrate a 30mm Medium Caliber Weapon System (MCWS) onboard the Stryker Double V Hull Infantry Carrier Vehicle (ICVVA1). The contract was awarded to enhance precision lethality capabilities to the Stryker Brigade Combat Team (SBCT) of the Army.
- In April 2021, the US Navy’s Shipboard Air Traffic Radar program in Low-Rate Initial Production (LRIP) awarded Saab with an LRIP option for three AN/SPN-50(V)1 shipboard air traffic radar. The LRIP phase two contract was worth USD 37.1 million, and delivery is scheduled to begin in 2022.
Table of Contents
1.1 Study Assumptions and Market Definition
1.2 Scope of Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
3.1 Market Size and Forecast, Global, 2018 - 2031
3.2 Market Share by Type, 2021
3.3 Market Share by Geography, 2021
3.4 Structure of the Market and Key Participants
3.5 Market Drivers and Restraints
3.6 Expert Opinion on United States Defense Market
4. MARKET DYNAMICS
4.1 Market Overview
4.2 Market Indicators
4.3 Market Drivers
4.4 Market Restraints
4.5 Technology Trends
4.6 PEST Analysis
5. MARKET SEGMENTATION (Market Size and Forecast by Value - USD billion, 2018 - 2031)
5.1 Armed Force
5.1.3 Air Force
5.2.1 Fixed-wing Aircraft
5.2.3 Ground Vehicles
5.2.4 Naval Vessels
5.2.6 Weapons and Ammunition
5.2.7 Protection and Training Equipment
5.2.8 Unmanned Systems
6. COMPETITIVE LANDSCAPE
6.1 Vendor Market Share
6.2 Company Profiles
6.2.1 Lockheed Martin Corporation
6.2.2 The Boeing Company
6.2.3 Raytheon Technologies Corporation
6.2.4 General Dynamics Corporation
6.2.5 Northrop Grumman Corporation
6.2.6 L3Harris Technologies Inc.
6.2.7 BAE Systems PLC
6.2.8 CACI International Inc.
6.2.9 Textron Inc.
6.2.10 Elbit Systems Ltd
6.2.11 Huntington Ingalls Industries Inc.
6.2.12 Kongsberg Gruppen ASA
6.3 Other Players
6.3.1 Airbus SE
6.3.2 Teledyne Technologies Incorporated
6.3.3 General Atomics
6.3.4 AeroVironment, Inc.
6.3.5 Sig Sauer Inc.
6.3.6 Leidos Holdings, Inc.
6.3.7 Saab AB
7. MARKET OPPORTUNITIES
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Frequently Asked Questions
What is the study period of this market?
The United States Defense Market market is studied from 2018 - 2031.
What is the growth rate of United States Defense Market?
The United States Defense Market is growing at a CAGR of >0.5% over the next 5 years.
Who are the key players in United States Defense Market?
Lockheed Martin Corporation, The Boeing Company, General Dynamics Corporation, Northrop Grumman Corporation, Raytheon Technologies Corporation are the major companies operating in United States Defense Market.