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MarketReportsOnline.com - The US Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017 Published: September 2012

No. of Pages: 230

Price: Single User: US $ 1250

Corporate User: US $ 2500

With the US defense budget for 2012 valued at US$645.7 billion, the nation has the largest defense market in the world. 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, the US defense budget, which declined at a CAGR of -0.77% during the review period, is expected to record a CAGR of 0.12% over the forecast period, largely due to the financial constraints caused by the global financial crisis. Threats from North Korea and Iran, modernization initiatives, an arms race with China and Russia, ongoing military operations, and the protection of allies are expected to drive the defense spending of the US. The US perceives a potential nuclear threat from Iran and North Korea, through their acquisition of long-range ballistic missiles. The tension between the US and North Korea further increased in November 2010, when the US criticized the attacks carried out by North Korea on South Korea.

600

12%

500

10%

400

8%

300

6%

200

4%

100

2%

0

0% 2008

2009

Capital expenditure (US$ bn)

2010 Revenue expenditure (US$ bn)

2011

2012 Defense expenditure growth %

The US must modernize its aging fleet of equipment, such as fighter aircraft, helicopters, land defense systems, and maritime equipment; however, the rising unit cost of defense systems poses a challenge to

Defense Expenditure Growth Rate (%)

Defense Budget (US$ Billion)

Figure 1: US Defense Expenditure (US$ Billion), 2009-2013


procurement funding. The cost of military hardware is increasing due to technological advancements and a shortage of skilled labor in the design, engineering, and manufacturing sectors, coupled with the rising cost of input materials, such as metal. In addition, the per-unit overhead costs at production facilities increased due to a reduction in the number of units manufactured. The US defense budget declined at a CAGR of -0.77% during the review period, to reach a value of US$645.7 billion in 2012. However, defense expenditure is expected to register a marginal decline of 0.12% in CAGR over the forecast period, declining to US$611.0 billion by 2017. Indeed, the government has announced defense budget cuts over the next five years, which will be achieved by reducing capital expenditure.

US Defense Industry Market Forecasts to 2017 About ICD Research ICD Research is a full-service global market research agency and premium business information brand specializing in industry analysis in a wide set of B2B and B2C markets. ICD Research has access to over 400 in-house analysts and journalists and a global media presence in over 30 professional markets enabling us to conduct unique and insightful research via our trusted business communities. Through its unique B2B and B2C research panels and access to key industry bodies, ICD Research delivers insightful and actionable analysis. The ICD Research survey capabilities grant readers access to the opinions and strategies of key business decision makers, industry experts and competitors as well as examining their actions surrounding business priorities. About Strategic Defense Intelligence Strategic Defense Intelligence's unique monitoring platform tracks global defense activity for over 2,500 companies and 65 product categories in real time and in a highly structured manner, giving a comprehensive and easily-searchable picture of all defense industry activity. The site features: daily updated analysis, comment and news, company and customer profiles, defense spending, tenders and contracts, product and technology intelligence, a research and analysis database providing access to industry and competitor reports to enable business and market planning, and fully customizable tools, including instant personalized report generation and custom alerts. Contact sales@marketreportsonline.com to order your copy of this report OR for further information.


US Defense Industry - Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017