Future of the US Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

Being the largest defense spender in the world, with a budget of over US$639 billion in 2018, the US is expected to sustain its superiority over other nations in the coming years. The US defense expenditure is expected to grow at a CAGR of around 1.98% during the forecast period to reach around US$742 billion by 2023.

The country’s defense expenditure will largely be driven by efforts to retain its military supremacy and initiatives to replace the aged and worn-out weapons that have been used in the Iraq and Afghanistan wars. Moreover, the country’s initiatives to deal with the turbulence in the Middle East that could pose a potential threat to the interests of the US are also expected to drive the expenditure over the forecast period. As a percentage of GDP, the country’s defense expenditure is expected to average 3.1% over the forecast period.

The capital expenditure is expected to average 37.5% during 2019 and 2023 and the share of revenue expenditure is expected to average 62.5% during the forecast period.

During 2013-2017, the US retained its position as the largest exporter of defense equipment in the world, and is expected to remain the same over the forecast period, primarily due to the increase in defense budgets of a number of US arms importing countries, including allies such as Saudi Arabia, UAE, Turkey, Taiwan, Australia, India, Iraq, South Korea, Singapore, Egypt, the UK, Japan, Qatar, Kuwait and Israel among others. The country possesses a diverse consumer base and historic data shows that Saudi Arabia, UAE and Turkey emerged as the largest consumers of US-manufactured defense goods.

The report "Future of the US Defense Industry Market Attractiveness, Competitive Landscape and Forecasts to 2023" offers detailed analysis of the US defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.

Moreover, this report provides the following analysis

• The US defense industry market size and drivers: detailed analysis of the US defense industry during 2019-2023, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns
  
• Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country
  
• Porter’s Five Force analysis of the US defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitution, intensity of rivalry, and barriers to entry
  
• Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years
  
• Market opportunities: details of the top five defense investment opportunities over the next 10 years
  
• Competitive landscape and strategic insights: analysis of the competitive landscape of the US defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis
  

Companies mentioned in this report Lockheed Martin, Raytheon, General Dynamics, Boeing, L-3 Technologies Inc., Northrop Grumman Corp., Science Application International Corp. (SAIC), Honeywell International Inc., Sikorsky Aircraft, General Electric (GE) Aviation, Bell, and Textron Marine and Land Systems.

Scope

• Being the largest defense spender in the world, with a budget of US$639.2 billion in 2018, the US is expected to sustain its superiority over other nations in the coming years. During the historic period, the total defense budget, including funding for Overseas Contingency Operations (OCO), was relatively high, registering a CAGR of 2.39% due to the increasing instability fuelled by events such as the Russian annexation of Crimea, the festering status quo in civil war Ukraine and the devolving security situation in Syria.
  
• Between 2014 and 2018, the US allocated an average of 35% of its total defense budget to capital expenditure, primarily to fulfill the equipment needs of its overseas contingency during the Iraq and Afghanistan wars. However, with the country expected to focus on the replacement of damaged and obsolete defense equipment rather than on war needs, the capital expenditure is estimated to average 37.5% over the forecast period. Consequently, the share of revenue expenditure is expected to average 62.5% during the forecast period as compared to 65% during 2014-2018.
  
• Opportunities are expected to emerge in Land-Based C4ISR, Critical Infrastructure Protection-Physical Security and Network Security, Multirole Aircraft and Airborne C4ISR
  

Reasons to buy

• This report will give the user confidence to make the correct business decisions based on a detailed analysis of the US defense industry market trends for the coming five years
  
• The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
  
• Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
  
• A deep qualitative analysis of the US defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts