Product Code: DF0491MR
Summary
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.
Oppurtunities 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
Table of Contents
Table of Contents
1. Introduction 12
- 1.1. What is this Report bout? 12
- 1.2. Definitions 12
- 1.3. Summary Methodology 14
- 1.4. About Strategic Defence Intelligence 15
2. Executive Summary 16
3. Market Attractiveness and Emerging Opportunities 18
- 3.1. Current Market Scenario 19
- 3.1.1. Primary Threat Perception 19
- 3.1.2. Military Doctrine & Strategy 20
- 3.1.3. Military Fleet Size 29
- 3.1.4. Procurement Programs 35
- 3.1.5. Top Procurement Programs by Value (US$ Million) 2018-2023 39
- 3.1.6. Social, Political and Economic Environment & Support for Defense Projects 40
- 3.1.7. Political and Strategic Alliances 41
- 3.2. Defense Market Size Historical and Forecast 43
- 3.2.1. US defense expenditure expected to increase at a CAGR of 1.98% over the forecast period 43
- 3.2.2. Defense spending drivers - initiatives to retain military edge, subsequent military modernization, instability in Middle East and rivalry with Russia & China 46
- 3.2.3. Defense expenditure as a percentage of GDP estimated to decline over the forecast period 48
- 3.2.4. Per capita defense spending projected to decline over the forecast period 50
- 3.3. Analysis of Defense Budget Allocation 52
- 3.3.1. Total Department of Defense (DoD) budget forecasted to grow at a CAGR of 1.98% 52
- 3.3.2. Share of revenue expenditure expected to increase over the forecast period 54
- 3.3.3. US defense capital expenditure expected to increase at a CAGR of 3.95% over the forecast period 56
- 3.3.4. Navy to receive the major allocation of the defense budget over the forecast period 60
- 3.3.5. Allocation for defense expenditure on army expected to increase over the forecast period 62
- 3.4. Homeland Security Market Size and Forecast 69
- 3.4.1. The US homeland security expenditure to reach US$84.2 billion by 2023 69
- 3.4.2. Prevention of terrorism, securing and managing borders, safeguarding cyberspace and disaster management to drive homeland security expenditure over the forecast period 71
- 3.4.3. The nation is at "highly affected" category of terrorism 73
- 3.4.4. The US faces high level of threats from terrorist organizations 74
- 3.4.5. The US has a terrorism index score of 5.4 76
- 3.5. Benchmarking with Key Global Markets 77
- 3.5.1. The US will dominate global military spending over the forecast period 77
- 3.5.2. US defense budget is much higher than other leading spenders 79
- 3.5.3. US is one of the top defense spenders in terms of expenditure as a percentage of GDP 80
- 3.6. Market Opportunities: Key Trends and Growth Stimulators 81
- 3.6.1. Top Defense Market Sectors by Value (US$ Million) - Projections over 2018-2023 81
- 3.6.2. Land Based - C4ISR 82
- 3.6.3. Critical Infrastructure Protection (CIP) - Physical Security 84
- 3.6.4. Critical Infrastructure Protection (CIP) - Network Security 85
- 3.6.5. Multirole Aircraft 86
- 3.6.6. Airborne - C4ISR 87
4. Defense Procurement Market Dynamics 88
- 4.1. Import Market Dynamics 90
- 4.1.1. US primarily imports defense equipment to build strategic relations 90
- 4.1.2. Defense imports expected to increase over the forecast period 91
- 4.1.3. The Germany and UK dominated the US defense imports during the historic period 92
- 4.1.4. Aircraft account for majority of arms imports 93
- 4.2. Export Market Dynamics 94
- 4.2.1. US arms exports are driven by political and economic factors 94
- 4.2.2. Arms exports expected to increase in the period 2019-2023 96
- 4.2.3. US defense exports to increase during the forecast period 97
- 4.2.4. Aircraft are the most exported defense equipment 98
- 4.2.5. The US maintains controlled defense export policy 99
5. Industry Dynamics 100
- 5.1. Five Forces Analysis 100
- 5.1.1. Bargaining power of Supplier: Low to Medium 101
- 5.1.2. Bargaining power of Buyer: High 101
- 5.1.3. Barrier to entry: Medium 101
- 5.1.4. Intensity of rivalry: Low to high 101
- 5.1.5. Threat of Substitution: Low to high 102
6. Market Entry Strategy 103
- 6.1. Market Regulation 103
- 6.1.1. The US defense industry is open to FDI 103
- 6.1.2. No offset policy exists in the US 104
- 6.1.3. US arms trade is heavily regulated 104
- 6.2. Market Entry Route 105
- 6.2.1. Budgeting Process 105
- 6.2.2. Procurement Policy & Process 107
- 6.2.3. Foreign OEMs enter the market through the acquisition of domestic defense companies 111
- 6.2.4. Joint product development programs, an attractive market entry route 111
- 6.2.5. Formation of partnerships with domestic defense firms provide good market entry opportunities 111
- 6.2.6. Direct sale of defense equipment provides foreign OEMs with an opportunity to enter the market 112
- 6.3. Key Challenges 113
- 6.3.1. Decreasing economies of scale and defense inflation 113
7. Competitive Landscape and Strategic Insights 114
- 7.1. Competitive Landscape Overview 114
- 7.2. Domestic Public Companies 117
- 7.2.1. Lockheed Martin Corp.: overview 117
- 7.2.2. Lockheed Martin Corp.: products 117
- 7.2.3. Lockheed Martin Corp.: recent announcements and strategic initiatives 122
- 7.2.4. Lockheed Martin Corp.: alliances 126
- 7.2.5. Lockheed Martin Corp.: recent contract wins 128
- 7.2.6. Lockheed Martin Corp.: financial analysis 134
- 7.2.7. Raytheon: overview 136
- 7.2.8. Raytheon: products 136
- 7.2.9. Raytheon: recent announcements and strategic initiatives 136
- 7.2.10. Raytheon: alliances 139
- 7.2.11. Raytheon: recent contract wins 141
- 7.2.12. Raytheon: financial analysis 147
- 7.2.13. General Dynamics: overview 149
- 7.2.14. General Dynamics: products 149
- 7.2.15. General Dynamics: recent announcements and strategic initiatives 150
- 7.2.16. General Dynamics: alliances 152
- 7.2.17. General Dynamics: recent contract wins 153
- 7.2.18. General Dynamics: financial analysis 158
- 7.2.19. Boeing: overview 160
- 7.2.20. Boeing: products 160
- 7.2.21. Boeing: recent announcements and strategic initiatives 161
- 7.2.22. Boeing: alliances 163
- 7.2.23. Boeing: recent contract wins 165
- 7.2.24. Boeing: financial analysis 169
- 7.2.25. L-3 Technologies, Inc.: overview 171
- 7.2.26. L-3 Technologies Inc.: products 171
- 7.2.27. L-3 Technologies, Inc.: recent announcements and strategic initiatives 172
- 7.2.28. L-3 Technologies Inc.: alliances 174
- 7.2.29. L-3 Technologies Inc.: recent contract wins 175
- 7.2.30. L-3 Technologies: financial analysis 178
- 7.2.31. Northrop Grumman Corp.: overview 180
- 7.2.32. Northrop Grumman Corp.: products 180
- 7.2.33. Northrop Grumman Corp.: recent contracts and strategic initiatives 180
- 7.2.34. Northrop Grumman Corporation: alliances 182
- 7.2.35. Northrop Grumman Corp.: recent contract wins 184
- 7.2.36. Northrop Grumman Corp.: financial analysis 188
- 7.2.37. Science Application International Corp. (SAIC): overview 190
- 7.2.38. Science Application International Corp. (SAIC): products 190
- 7.2.39. Science Application International Corp. (SAIC): recent contracts and strategic initiatives 191
- 7.2.40. Science Application International Corp. (SAIC): alliances 192
- 7.2.41. Science Application International Corp. (SAIC): recent contract wins 193
- 7.2.42. Science Application International Corp. financial analysis 197
- 7.2.43. Honeywell International Inc.: overview 199
- 7.2.44. Honeywell International Inc.: products and services 199
- 7.2.45. Honeywell International Inc.: recent announcements and strategic initiatives 200
- 7.2.46. Honeywell International Inc.: alliances 201
- 7.2.47. Honeywell International Inc.: recent contract wins 202
- 7.3. Domestic Private Companies 205
- 7.3.1. Sikorsky Aircraft: overview 205
- 7.3.2. Sikorsky Aircraft: products 205
- 7.3.3. Sikorsky Aircraft: recent announcements and strategic initiatives 205
- 7.3.4. Sikorsky Aircraft: alliances 207
- 7.3.5. Sikorsky Aircraft: recent contract wins 209
- 7.3.6. General Electric Aviation: overview 212
- 7.3.7. General Electric Aviation: products 212
- 7.3.8. General Electric Aviation: recent contracts and strategic initiatives 213
- 7.3.9. General Electric Aviation: alliances 214
- 7.3.10. General Electric Aviation: recent contract wins 215
- 7.3.11. Bell: overview 217
- 7.3.12. Bell: products and services 217
- 7.3.13. Bell: recent announcements and strategic initiatives 217
- 7.3.14. Bell Helicopter Textron, Inc.: alliances 218
- 7.3.15. Bell Helicopter Textron, Inc.: recent contract wins 219
- 7.3.16. Textron Marine and Land Systems: overview 221
- 7.3.17. Textron Marine and Land Systems: products 221
- 7.3.18. Textron Marine and Land Systems: recent announcements and strategic initiatives 222
- 7.3.19. Textron Marine and Land Systems: alliances 223
- 7.3.20. Textron Marine and Land Systems: recent contract wins 224
8. Business Environment and Country Risk 226
- 8.1. Economic Performance 226
- 8.1.1. GDP Per Capita 226
- 8.1.2. GDP, Current Prices 227
- 8.1.3. Exports of goods and services in local currency 228
- 8.1.4. Imports of goods and services in local currency 229
- 8.1.5. Gross National Disposable Income (US$ Billion) 230
- 8.1.6. Market Capitalization of Listed Companies 231
- 8.1.7. Market Capitalization of Listed Companies (% of GDP) 232
- 8.1.8. Government Cash Surplus/Deficit as % of GDP 233
- 8.1.9. Goods exports as % of GDP 234
- 8.1.10. Goods imports as % of GDP 235
- 8.1.11. Service Imports as % of GDP 236
- 8.1.12. Service Exports as % of GDP 237
- 8.1.13. Foreign Direct Investment 238
- 8.1.14. Net foreign direct investment as % of GDP 239
- 8.1.15. Mining, Manufacturing, Utilities Output 240
9. Appendix 241
- 9.1. About SDI 241
- 9.2. Disclaimer 241
