United States Defence and Security Report Q4 2011
Business Monitor International, November 2011, Pages: 113
United States Defence and Security Report provides industry professionals and strategists, corporate analysts, defence and security associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on United States's defence and security industry.
As 2011 unfolded, the US defence industry became increasingly disturbed at the scope of spending cuts that could have a momentous impact on the sector. As much as US$1.1trn could be squeezed out of US defence spending over the next 10 years, although as of September 2011 many uncertainties remained. Congress’ passing of the Budget Control Act 2011 provided some idea of what could be expected in terms of procurement trends over the decade.
The Obama administration will and has been obliged to push the Department of Defense (DoD) to cut US$450bn in defence expenditure over the 10-year period but an additional US$500bn in cuts may be required. The latter cut, much feared by defence firms, is to occur in the event that a bipartisan ‘super committee’ fails to identify as much as US$1.5trn in overall government spending. The deadline for the super committee to reach an agreement – November 23 2011 – has therefore become the key date defence firm diaries. Indeed, 2013 will also be a key year for US defence companies as the likely start for spending cuts. The trajectory of the US defence industry and public expenditure on it will rest on these partisan tussles.
However, the effect of government spending cuts on the US defence industry can often be heavily overplayed. Alternative views see the reductions as cyclical over the long-term and only significantly impacting the country’s dominant prime contractors – Lockheed Martin, Northrop Grumman and Raytheon – which rely on the government for the vast majority of their projects and sales. In a sector as large as US defence, it is questionable whether the cuts would operationally hamper companies outside of the leading 10, where international markets and commercial variants of military-grade equipment are often more strongly pursued.
Part of the budgetary pressure will be met with cuts in defence expenditure in Afghanistan, where the DoD has been tasked with maintaining a military and law enforcement force while sharply reducing costs. As of late 2011, the DoD was expected to cut Afghan security spending to under US$6bn by 2014, down from US$13bn. However, the cuts will certainly also impact procurement, with the Army and Marine Corps’ US$54bn Joint Light Tactical Vehicles (JLTV) programme finally terminated in September 2011 and with fears growing over the commitment to the major F-35 Joint Strike Fighter programme.
However, a likely scenario as a result of the multi-year spending cuts is a shift in procurement towards unmanned systems. US-based unmanned aerial vehicle (UAV) manufacturers – including General Atomics, Boeing or AeroVironment to name a few – are producing units that offer greater propulsion, endurance and larger payload capacities that increasingly include munitions.
Executive Summary
SWOT Analysis
US Security SWOT
US Political SWOT
US Economic SWOT
US Business Environment SWOT
Global Political Outlook
Global Hotspots: Libya, Iran, Afghanistan, Korea, Greece
Table: Election Timetable
United States
Latin America
Western Europe
Russia And The Former Soviet Union
Middle East And North Africa
Asia
Wild Cards To Watch
Security Risk Analysis
Table: Developed States Security Risk Ratings (scores out of 100, with 100 the best)
Table: Developed States Terrorism Vulnerability To Terrorism Index
Political Risk Analysis
Political Overview
Domestic Politics
Foreign Policy
Long-Term Political Outlook
Domestic Security Overview
Internal Security
Transit Vulnerability
Internal Terrorism
Cyber-Terrorism
Pandemics
Crime And Drugs
External Security Situation
Table: Regional Insurgent Groups – US-Designated Foreign Terrorist Organizations (FTOs)
Quadrennial Defense Review (QDR)
Iran
North Korea
The Afghanistan Campaign
Iraq
Yemen
Armed Forces And Government Spending
International Deployments
Table: Foreign Deployments
Iraq
Weapons Of Mass Destruction
Nuclear And Missile Defence Policy
Market Overview
Arms Trade Overview
New Markets
Industry Trends And Developments
Defence And Procurement Trends And Developments
Major New Products And Technical Developments
Industry Forecast Scenario
Armed Forces
Table: United States Armed Forces Personnel, 2002-2008 (‘000 personnel, unless otherwise stated)
Table: Availability Of Manpower For Military Services, 2008-2015 (aged 16-49, unless otherwise stated)
Government Expenditure On Defence Industry
Table: US Defence Expenditure, 2008-2015
Table: Defence Expenditure Scenarios – Changing % Of GDP, 2008-2015 (US$mn)
Defence Trade
Table: US Defence Exports, 2008-2015 (US$mn)
Table: US Defence Imports, 2008-2015 (US$mn)
Table: US Defence Trade Balance, 2008-2015 (US$mn)
Macroeconomic Outlook
Company Profiles
Boeing
General Dynamics
L-3 Communications
Lockheed Martin
Northrop Grumman
Raytheon
BMI Methodology
How We Generate Our Industry Forecasts
Defence Industry
City Terrorism Rating
Table: Methodology
Sources
- Boeing
- General Dynamics
- L-3 Communications
- Lockheed Martin
- Northrop Grumman
- Raytheon
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