Italy & Finland Defense Industry Analysis and 2019 Forecasts in New Market Research Reports

Feb 26, 2014, 07:45 ET from

DALLAS, February 26, 2014 /PRNewswire/ -- offers "Future of the Italian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2019" and "Future of the Finnish Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2019" market research reports in its store.

Italy which is one of the largest defense industry spenders in Europe and tenth largest spender in the world is projected to spend US$147.2 billion on its armed forces during the forecast period. In 2014, the Italian government allocated US$27.67 billion for the total defense budget which recorded a CAGR of 5.18% during 2010 to 2014. Defense expenditure is inclusive of the expenditure on the defense function, homeland security, and other expenses. Italian defense expenditure is primarily driven by increasing terrorist threats, participation in peacekeeping initiatives, replacing the ageing military equipment, and the modernization of defense forces with advanced technology equipment. The defense function stood at US$19.13 billion in 2014 and is expected to increase at a CAGR of 3.09% during the forecast period, to reach US$22.32 billion in 2019. Capital expenditure will also see a marginal increase which is anticipated to grow at 5.16% due to the country's heavy procurement pattern during the forecast period. The Italian defense industry is expected to focus on modernization of the armed forces by implementing various procurement programs that include F-35 Joint Strike Fighter project, Typhoon multirole combat aircraft, FREMM frigates, NH 90 helicopters, and Medium Extended Air Defense System (MEADS) program. Complete report is Future of the Italian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2019 available at .

Finland's total defense expenditure stands at US$3.7 billion in 2014 and is expected to grow at a CAGR of 5.79% over the forecast period, to reach US$4.34 billion in 2019. Finnish defense expenditure is primarily driven by participating in peacekeeping initiatives, the upgrade of military equipment such asF-18 Hornet jet fighters, the soldier modernization program, and the procurement of advanced technology equipment. The Finnish defense industry is expected to focus its expenditure on NASAMS II missile system, Leopard 2A6 main battle tanks, soldier combat systems, transport helicopters, ballistic protection and smart munitions systems, cyber security, and C4ISR systems. The country's defense budget stands at 1.16% of GDP in 2014 and is expected to increase marginally to 1.23% of GDP by 2019. During 2010-2014, the average capital expenditure allocation stood at 31.6% of the total defense budget, and this is expected to increase marginally over the forecast period to reach 32.1%. Revenue expenditure is expected to decrease from an average of 68.4% during 2010-2014 to 67.9% in the forecast period due to austerity measures by the government. The defense ministry plans to reduce the number of mobilized troops from 350,000 to 230,000 by 2015 and save on training costs by conducting joint activities with the Nordic partners. Complete report Future of the Finnish Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2019 is available at .

Key Highlights from Future of the Italian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2019 report include:

The country's defense budget declined during 2010 to 2014 due to various austerity measures implemented by the government, however, the country's procurement plans still remain ambitious and the government is keen to continue modernization albeit at a slower pace. For example: In 2012, Italy's initial procurement of 131 F-35 fighter jets was reduced to 90 aircraft. The country is anticipated to spend US$16 billion over the procurement of the aircrafts which include F-35 fighter and Eurofighter Typhoon over 45 years starting in 2015. Further; the Italian Navy has also obtained funding for building 10 naval vessels consisting of eight multipurpose ships, one amphibious ship and a logistics vessel over the next decade. The multipurpose ships are procured for combat purposes and to support humanitarian relief operations. Additionally to replace its ageing Fincantieri-built Lupo and Maestrale-class ships, Italy has undertaken the FREMM multi-mission ship program in collaboration with France to build 10 frigates to be delivered by 2022. The vessels will be equipped with the SAAM Aster 15 missile system, Teseo Mk2 sea-skimming anti-ship missiles to support anti-submarine warfare and anti-air warfare missions.

A rise in the number of internal security threats, terrorist attacks, the emergence of home-grown insurgency networks, a number of anarchist groups active in the country are factors driving homeland security expenditure in the country. Terrorist threats: Terrorism is a growing problem in the Italy and the government is increasing its efforts to dismantle terrorist-related groups within its borders, and maintain cooperation with international partners in this aspect. In January 2014, the Italian Olympics committee has received a terrorist threat concerning the Games due to start next month in Sochi, Russia. Further in 2013, the Italian police department arrested a group of Tunisian men who were creating an Islamic militant cell in the Southern Italian town. In 2009, the Italian government investigated 216 terror threats against the country, including the bombing of a northern police barrack in October. Italy perceives Islamist organizations, such as Al-Qaeda, as the biggest threat to its internal security. Italy is working closing with the US on countering terrorist financing and coordinating with other foreign participants as an active member of the Financial Action Task Force and the Egmont Group. Additionally Italy is a founding member of the Global Counterterrorism Forum (GCF), which is a multilateral platform focusing on addressing the challenges of counterterrorism.

Italian defense exports have increased significantly over 2010 to 2014 due to the various joint development programs such as the Joint Strike Fighter, Horizon-class Frigates programs, Eurofighter typhoon and the FREMM program etc. In addition, the Italian defense industry has collaborated with several other equipment manufacturers thereby boosting its export after the recession. Italy was the seventh largest exporter of arms over 2010 to 2014. However, in the forecast period, defense exports are expected to decline further due to the defense budget cuts of most European countries, such as France and Greece, which are the major defense trading partners of Italy. With the expansion of growing BRIC markets like India and Brazil the demand for defense goods is expected to be strong and Italy is expected to experience overall exports growth during the forecast period.

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Major Highlights from Future of the Finnish Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2019 report include:

Finland is increasing its efforts to upgrade its air defense missile capabilities by procuring NASAMS II system, jointly developed by Norwegian Kongsberg Defense and US Raytheon under a contract worth US$460 million. Moreover, the country is anticipated to spend more than US$1 billion on the upgrade of the F-18 super hornet military aircraft during the forecast period. Due to austerity measures, the defense ministry is forced to focus on the acquisition of high quality secondhand equipment. In January 2014, the country joined with the Netherlands to purchase 100 secondhand Leopard 2A6 main battle tanks under a contract worth US$274 million. This initiative was taken to strengthen the upgrade plan of the army's armored battlefield units between 2015 and 2019. Furthermore, with the government aiming to reduce its troop size by 100,000 over the next five years, the country will be able to control revenue expenditures efficiently while procuring advanced weapons.

Finland is a destination for men and women trafficked for forced labor from China, Pakistan, and Bangladesh. The government enhanced its anti-trafficking measures in 2012 with increased collaboration between labor inspectors and police officials. Additionally, the Finnish Border Guard is focused on upgrading to the latest technology to assist in protecting its land borders, and is improving its sensor technology and updating data systems. Furthermore, the country plans to recruit 455 police officers by 2020 to provide enhanced internal security. In order to prevent these crimes, Finland will need to invest in surveillance equipment such as CCTV and enhance its border security by procuring electronic identification systems and automated border crossing systems.

In recent years, there have been a growing number of collaborations between Nordic countries which will enhance the defense capabilities of the country along with boosting the indigenous market. Finland is a part of NORDEFCO (Nordic Defence Cooperation) which is a collaboration among the Nordic countries, established in 2009, with the objective of strengthening the member countries' defense capabilities and operational capacity through cost-effective collaboration. The partners have witnessed converging military needs including explosive devices, long-range precision weapons, air surveillance, ground air defenses, and future mechanized battalion system. Therefore, member countries have planned strategic solutions including enhanced regional security, heightened common equipment procurements, and the establishment of joint operating units. The Nordic Vision 2020, rolled out in 2013, envisions an established committee of specialists and advisors responsible for conducting joint capacity building and security sector reform tasks. Moreover, regular cross-border training will contribute to maintaining and developing capabilities jointly, which will assist in the rapid deployment of forces to be used for the NATO Response Force and EU Battle Groups. Furthermore, the members aim to increase interoperability and create a pool of resources to facilitate air and sea surveillance in the Nordic region. For example, Sweden and Finland will join NATO partners Norway and Denmark to provide air surveillance patrols over Iceland in 2015.

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