As the Sequester Clock Ticks Down, Will the US Defense Market Remain the Biggest in the Global Defense Industry?
FARMINGTON, Conn., Feb. 28, 2013 /PRNewswire-iReach/ -- The US has the largest defense market in the world with a budget of $645.7 billion in 2012. Expenditure is primarily driven by the modernization of existing weapon systems as well as the acquisition of advanced defense equipment capable of enhancing interoperability among the armed forces. Due to its high levels of military spending, a large number of opportunities are available to companies keen to supply the nation with defense equipment; however, pressure to reduce the debt burden after the US financial crisis has shown a negative impact on the government budget and caused cuts in defense budget as well. The US defense budget (including OCO funding), which declined at a CAGR of -0.77% during the review period, is expected to register a CAGR of -0.12% over the forecast period to reach $611 billion by 2017. Furthermore, defense expenditure as a percentage of GDP is also estimated to decline, from an average of 4.6% during the review period to an average of 3.4% over the forecast period.
"Future of the US Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2017," a report by Strategic Defence Intelligence, provides detailed analysis of the current industry size and growth expectations from 2013 to 2017, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas. Request a free report sample here.
Will sequestration – set to go live this Friday on March 1 – push the US down from the leading position in the global defense market? What's the outlook for the overall defense market? How are defense programs across the globe modifying their own budgets and spending?
According to a new survey report by Strategic Defence Intelligence "Global Defense Survey 2013 - Business Outlook, Key Markets and Opportunities," 71% and 66% of respondents from defense organizations and defense contractor companies identify defense budget pressures as the principal factor driving changes in their organizations business strategies respectively. Respondents from Europe and the Asia-Pacific region highlighted the economic crisis leading to defense budget cuts globally and China's significant increase in defense expenditure leading to other Asian countries increasing their defense spending as the most important trends in the global defense industry.
The survey results further reveal that 61%, 54%, and 44% of buyer respondents identify 'joint venture programs to decrease development cost', 'cost-cutting measures', and 'consolidation of operations' as the chief strategies that suppliers can adopt to deal with a decrease in defense expenditure, respectively. Moreover, factors such as 'engage in partnerships to optimize working capital' and 'reduce costs', 'improve customer service', and 'reduce prices' are highlighted by defense contractors as the key expectations from their suppliers in the next five years. Additionally, respondents from other service providers identified engage in partnerships to optimize working capital and reduce costs, product innovation, and collaborating on R&D as the key expectations from their suppliers in the next five years.
Meanwhile, Latin America is emerging as an attractive market for defense suppliers. Stable market revenue in this region is mainly drive the strong need to replace legacy defense platforms. On the other hand, defense procurement projects offer the Latin American countries the opportunity to not only increase security but also improve the capabilities of local defence industry due to the technology transfer and partnerships with foreign suppliers.
Frost & Sullivan's "Latin America Defence Market Assessment" answers key questions pertaining to recent and expected trends, defense requirements over the next ten years, current procurement plans, and also addresses how defense budget cuts will impact Latin America's defense procurement plans.
Find more market research for the military and defense industry
With nearly 30 years of market research experience, Global Information, Inc (GII) is the single best resource for companies entering new markets, expanding their business, and securing their positions in their respective industries. With tens of thousands of reports from over 400 publishers in nearly every vertical market, our market research and forecast data can give companies the edge they need to stay ahead of the competition and plan for every contingency.
The reports above are just a few examples from the hundreds of research reports we have available for the military and defense market. For a free consultation on the market research you need, contact us today!
About Global Information Inc. Global Information (GII) (http://www.giiresearch.com) is an information service company partnering with over 300 research companies around the world. Global Information has been in the business of distributing technical and market research for more than 25 years. Expanded from its original headquarters in Japan, Global Information now has offices in Korea, Taiwan, Singapore, Europe and the United States.
Media Contact: Jeremy Palaia Global Information, Inc., 1-860-674-8796, Press@gii.co.jp
News distributed by PR Newswire iReach: https://ireach.prnewswire.com
SOURCE Global Information, Inc.