Market Trends of Weapons and Ammunition Industry
An Increase in Demand for Newer Generation Portable Explosive Weapon Systems Drive the Market Growth
- An increasing defense expenditure worldwide and increasing procurement of next-generation weapons from the defense forces drive the market's growth. In 2021, global defense spending reached over USD 2 trillion. The evolution of the battlefield environment has necessitated the subsequent upgrade and customization of armament.
- Currently, the US Army is focusing on improving its brigade combat teams' short-range air defense capabilities. The emergence of unmanned aerial systems (UASs), cruise missiles, and long-range rockets (LRRs) threatens ground infantry troops. Hence, the US Army prioritized short-range air defense (SHORAD) and started reactivating units to this core competency. In addition to upgrading the M72 shoulder-fired rocket launcher to reduce its overall weight and develop a variety of warheads, the US Army and the US Marine Corps intend to adopt the weapon primarily as a lightweight anti-tank weapon.
- Also, European countries are increasing their defense expenditures due to the ongoing war between Russia-Ukraine, cross-border conflicts, and increasing terrorism across the region. The German government had decided to supply EUR 100 billion for military investments from its 2022 budget. The need for high-precision, lightweight, and compact weapon systems has led innovators to invest considerable resources in developing sophisticated weapon systems.
- The evolution of technology has led to the development of guided weapons with a high target-hit ratio, supported by a range of accessories, such as weapon sights, night vision devices, aiming lasers, laser rangefinders, and fire control systems. Such developments are expected to drive the portable explosives segment of the weapons and ammunition market during the forecast period.
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North America is Projected to Show Remarkable Growth During the Forecast Period
- North America has dominated the market and continues its domination during the forecast period. The growth is attributed to the increasing defense expenditure and growing procurement of advanced weapons and ammunition from the US and Canada. The US was the largest defense spender in the world, with a defense budget of USD 801 billion in 2021. In 2023, the US government allocated a budget of USD 4.7 billion for weapons procurement.
- Furthermore, the US has been the pioneer of light weaponry and has positioned itself at the apex of military dominance through a steady growth rate in the procurement of advanced weapon systems.
- The changing nature of warfare is one of the prime reasons for the US Department of Defense's (DoD's) increased spending on equipping its armed forces with better weapons. Weapons are subjected to extensive testing to ensure reliable operations and estimate the level of performance enhancement with a new integrated design change.
- For instance, in February 2023, the United States signed a contract worth USD 522 million with Northrop Grumman Corporation and Global Military Products to produce artillery ammunition for Ukraine.
- Also, in September 2022, the US Army awarded a five-year contract worth USD 114 million to supply the 5.56 mm NATO training ammo. The AA40 5.56 mm NATO frangible ammunition is used by the US military branches in rifles and carbines chambered for training.
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