Defense Market in US to grow by USD 169.43 Billion (2024-2028), driven by rising demand for unmanned aerial vehicles. Report on how AI is driving market transformation - Technavio

NEW YORK, Jan. 29, 2025 /PRNewswire/ -- Report with the AI impact on market trends - The defense market in US size is estimated to grow by USD 169.43 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of  4.91%  during the forecast period. Increase in demand for unmanned aerial vehicles in US is driving market growth, with a trend towards increase in technological innovation in defense industry. However, shortage of skilled labor in defense industry in US  poses a challenge. Key market players include Airbus SE, BAE Systems Plc, Elbit Systems Ltd., General Dynamics Corp., General Electric Co., General Motors Co., Honeywell International Inc., Huntington Ingalls Industries Inc., Kongsberg Gruppen ASA, L3Harris Technologies Inc., Lockheed Martin Corp., Neo Tech Inc., Northrop Grumman Corp., Oshkosh Corp., Polaris Inc., QinetiQ Ltd., Revision Military, RTX Corp., Safeguard, Smith and Wesson Brands Inc., Textron Inc., Thales Group, and The Boeing Co.

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Market Driver

The US defense market is experiencing significant trends in military expenditures, with a proposed President's budget request of USD753 billion for FY2022. Key areas of focus include helicopters, space capabilities, and defense contracts with FDI investors. The Space Force's development and changing regulations are driving upgrade contracts for advanced aircraft and satellites. The Navy and Army continue to prioritize Sea- and Air-based defense, with major investments in Battle Force Ships, Aircraft Carriers, and Fighter Aircrafts. Emerging threats from terrorism require counterterrorism efforts and intelligence capabilities, leading to demand for operational bases, military communications, and deployable networking. The defense budget is influenced by strategic imperatives, ranging from large army and air force expenditures to support and auxiliary equipment like Radar, Sonars, Overhaul services, and Defense support. Market drivers include evolving security needs, emerging threats, and technological advancements. Major competitors and macroeconomic indicators impact revenues and market shares, making market intelligence a crucial tool for companies. The Global Market Model provides insights into supply-demand gaps, while market research and consumer research help companies adapt to changing market conditions. The defense market size includes Military drones, autonomous fighter jets, unmanned combat vehicles, and various defense equipment like Missiles, Tanks, Light Weapons, and Armored Vehicles. Low-interest rates and technology advancements, such as Artificial intelligence and design upgradations, are further shaping the market landscape. 

The defense market in the US is significantly driven by technological innovation. The US government and defense industry collaborate to invest in advanced technologies, such as fuel-efficient aircraft designs, emissions reduction systems, and aerodynamic enhancements. These innovations prioritize performance and efficiency, enabling platforms to complete missions more effectively. Additionally, advanced sensor systems and autonomous technologies are crucial components of modern defense solutions. Industry leaders are also adopting cutting-edge technologies like additive manufacturing, energy-efficient propulsion systems, and advanced sensor technologies to meet evolving customer needs and defense challenges. Overall, these advancements contribute to the growth and competitiveness of the US defense industry. 

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Market Challenges

• The US defense market faces significant challenges in the form of increasing military expenditures and changing regulations. The President's budget request for defense spending continues to be a major driver, with a focus on advanced aircraft, helicopters, Space Force, and satellite capabilities. FDI investors are seeking defense contracts in areas like Air-based and Sea-based defense, radar, sonars, overhaul services, and defense support. Evolving security threats, including terrorism and emerging enemies, necessitate military modernization and upgrades. The risk of terrorist attacks and external security threats require counterterrorism efforts and intelligence capabilities. Strategic resources, operational bases, and military communications demand seamless connectivity and intelligence sharing through deployable networking. Major competitors, such as China and Russia, are increasing their defense budgets, creating supply-demand gaps in the market. Market intelligence platforms and market research firms provide valuable insights into these trends, helping companies navigate the market's drivers and restraints. The defense market size includes revenue opportunities for fighter aircrafts, military helicopters, battle force ships, aircraft carriers, frigates, destroyers, corvettes, torpedo boats, support crafts, submarines, nuclear submarines, armored vehicles, missiles, tanks, light weapons, defense support, auxiliary equipment, and military drones. Technology advancements, such as autonomous fighter jets, unmanned combat vehicles, and artificial intelligence, are transforming the industry. The market's future growth will depend on strategic imperatives, ranging from large army and air force budgets to emerging threats and evolving security needs.
• The US defense market may experience challenges in its growth due to a shortage of skilled workers, including engineers, technicians, and researchers. This labor shortage limits defense companies' ability to innovate and develop new technologies, causing delays in project timelines for defense programs. Delays in product development, testing, and deployment negatively impact market growth. Additionally, the high demand for skilled labor in the defense sector results in increased labor costs as companies compete for talent. Addressing this labor shortage through education and training initiatives, as well as collaboration between industry and academic institutions, is crucial for the continued growth and competitiveness of the US defense industry.

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Segment Overview 

This defense market in US report extensively covers market segmentation by  

1. Type 
• 1.1 Manual defense equipment
• 1.2 Autonomous defense equipment
2. Platform 
• 2.1 Airborne
• 2.2 Land
• 2.3 Naval
3. End-user 
• 3.1 Military
• 3.2 Government agencies
• 3.3 Defense contractors
4. Geography 
• 4.1 North America

1.1 Manual defense equipment-  Manual defense equipment refers to military hardware, tools, and devices that are manually operated by personnel without automation or electronic systems. This category encompasses a wide range of applications in the US defense sector, including small arms and infantry weapons, personal protective equipment (PPE), handheld communication devices, field engineering tools, and medical kits and first aid supplies. Infantry forces utilize manual defense equipment such as rifles, handguns, machine guns, grenades, and rocket launchers for engaging enemy targets, providing suppressive fire, and defending ground positions. PPE, including helmets, body armor, ballistic vests, and gas masks, protects military personnel from physical harm, ballistic threats, chemical agents, and environmental hazards during combat operations. Handheld communication devices, such as radios, walkie-talkies, and signaling devices, enable soldiers to communicate, coordinate movements, and receive orders from command units in the field. Combat engineers and support personnel use manual tools like shovels, axes, wire cutters, entrenching tools, and demolition charges for construction, fortification, obstacle clearance, and IED disposal. Medical kits and first aid supplies, such as first aid kits, tourniquets, bandages, and field surgical instruments, are essential for providing emergency medical care, trauma treatment, and casualty evacuation in combat situations. Prominent suppliers of manual defense equipment to the US military include Smith & Wesson Brands Inc., which manufactures handguns, rifles, and other small arms for military and law enforcement use. Revision Military supplies protective eyewear, helmets, and integrated head protection systems for military and law enforcement applications. Combat Medical Safeguard is a supplier of tactical medical kits, trauma supplies, and casualty evacuation equipment for the military and first responders. These vendors play a crucial role in supplying manual defense equipment to support the US military's operational needs and mission requirements, ensuring military personnel's readiness, effectiveness, and survivability during defense operations. Consequently, the manual segment is expected to grow in the defense market in the US during the forecast period.

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Research Analysis

The Defense Market in the US is characterized by significant military expenditure, with the defense budget consistently ranking among the highest in the world. The President's budget request sets the tone for the annual defense spending, which includes funding for advanced aircraft such as Fighter Aircrafts and Military Helicopters, Battle Force Ships, and Aircraft Carriers. FDI investors play a crucial role in the market, particularly in the production of helicopters and advanced technology for Space capabilities, including Radar and Sonars. Changing regulations and the establishment of the Space Force have created new opportunities for market growth. The market intelligence platform provides valuable insights into supply and demand dynamics, helping stakeholders navigate the complex defense ecosystem. Overhaul services, Defense support, and Auxiliary equipment are essential components of the market, ensuring the readiness and maintenance of military assets. Emerging threats from various geopolitical hotspots and macroeconomic indicators continue to shape the defense landscape. The market for defense equipment is diverse, with a focus on the latest technologies and capabilities to address these threats. The demand for Sonar and Radar systems, for instance, remains high due to their critical role in detecting and countering underwater threats. Overall, the Defense Market in the US remains dynamic, driven by technological advancements, geopolitical tensions, and evolving regulatory frameworks.

Market Research Overview

The Defense Market in the US is driven by large defense budgets, with defense expenditures reaching in the range of hundreds of billions of dollars annually. The President's budget request sets the tone for military expenditures, prioritizing areas such as military helicopters, Space capabilities, and advanced aircraft. FDI investors play a significant role in the market, providing crucial resources and technologies. The changing regulatory landscape, including the establishment of the Space Force, brings new opportunities for defense contractors. Upgrade contracts for legacy systems and the acquisition of new technologies, such as satellites and military drones, are major drivers. The Navy and Air Force are key consumers, with a focus on Air-based and Sea-based defense, as well as support and auxiliary equipment. Evolving security threats, including terrorism and emerging competitors, are strategic imperatives. The risk of terrorist attacks and the need for intelligence capabilities, operational bases, and military communications require seamless connectivity and intelligence sharing. Deployable networking, radar, sonars, overhaul services, and defense support are essential components of the defense ecosystem. Market intelligence platforms provide valuable insights into the Defense Market, including macroeconomic indicators, market intelligence firm company research, and market research. Technology advancements, such as autonomous fighter jets and unmanned combat vehicles, are shaping the future of defense. The Global Market Model and supply-demand gaps offer valuable insights into market trends and opportunities. Military modernization efforts, including design upgradations and the integration of artificial intelligence, are key priorities. The market size for defense is significant, with major competitors vying for revenues and market shares. The Defense Market is a dynamic and complex ecosystem, requiring a deep understanding of the latest trends, drivers, and restraints.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Type
• Manual Defense Equipment
• Autonomous Defense Equipment
• Platform
• Airborne
• Land
• Naval
• End-user
• Military
• Government Agencies
• Defense Contractors
• Geography
• North America

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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