BOSTON, Sept. 26, 2017 /PRNewswire/ -- Force modernization will be one of the primary factors underpinning growth in global defense spending, driven by unprecedented developments in autonomous systems, missile, space and cyber-electronic warfare, and other technologies. Strategy Analytics: The Strategy Analytics Advanced Defense Systems (ADS) service report, "Global Defense Spending Outlook 2016-2026," forecasts the global defense budget will grow to $2.41 trillion in 2026, with the opportunities available to industry growing at a CAGR of 3.5% to reach $771 billion.
Asif Anwar, Director of the ADS service notes, "Our analysis reveals a number of common drivers that recur within and across the different regions that will provide the impetus for industry growth. These include combating the increasing menace of cyber threats- with both defensive and offensive capabilities; maritime surveillance and border protection in the face of evolving threats especially from unmanned systems; increasing mission envelopes with advanced radar, long range missile, unmanned systems and space-based capabilities."
Strategy Analytics' 2017 global defense analysis is based on an assessment of 95 countries that spent a minimum of $500 million on their annual defense in 2016. Strategy Analytics' outlook for global defense spending is based on baseline information from SIPRI (Stockholm International Peace Research Institute); information on the SIPRI data can be found at http://www.sipri.org/research/armaments/milex/milex_database/milex_database.
This is followed by an individual assessment of each of the countries, looking at a range of factors including GDP growth, threat perception and political intent on force modernization and indigenization of the local defense industry covering a ten-year timeframe. Strategy Analytics defense spending outlook forecast is based on a range of factors used to assess global, regional and country-by-country analysis of overall military spending covering procurement (including R&D), services, personnel, infrastructure etc. This in turn provides the basis for forecasting platform, system, subsystem and enabling technology spend that underpins subsequent forecasts.
Mr. Anwar concluded, "Global defense spending stabilized in 2016 following a dip in 2015, and this growth is forecast to continue in 2017 to reach $1.75 trillion. A renewed emphasis on growing defense spending in the USA, bar the limitations of a continuing resolution, coupled with a changing economic environment in China will mean that defense spending in the Asia-Pacific (APAC) region is unlikely to surpass North American spend levels through 2026. However, APAC defense spending will maintain the strongest growth trajectory, with a 5.4% CAGR (compound annual growth rate), almost double the defense spending growth rate projected for North America."
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SOURCE Strategy Analytics