Teal Group Predicts Worldwide Military UAS Spending of $258.7 Billion Over the Next Decade

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Jan 03, 2024, 14:23 ET

WASHINGTON, Jan. 3, 2024 /PRNewswire/ -- Due in part to its increasing use on the battlefield, Unmanned Aerial Systems (UAS) will continue to be one of the most dynamic growth sectors of the world aerospace industry this decade, report Teal Group analysts in their latest market analysis.

Teal Group's 2023/2024 World Military Unmanned Aerial Systems Market Profile & Forecast estimates that UAS procurement funding will increase from the current worldwide level of just over $14 billion annually in 2024 to $23.1 billion in 2033, totaling $186.8 billion over the next 10 years. Military UAS research spending would add another $71.8 billion over the decade. These numbers include estimates of classified US spending in procurement and R&D.

Country-by-Country Analysis

The study analyzes the world military drone market on a country-by-country basis. Once limited to the world's major armed forces, military drones are now ubiquitous. They have played a remarkable role in recent conflicts, with extensive use in the ongoing Ukraine-Russia War.

Senior analyst Steve Zaloga notes that "The Ukrainian Armed Forces have used inventive and successful tactics with their drones, both for artillery spotting and mini drone strikes. The Ukrainians tailored their drone force to the battlefield circumstances, favoring large numbers of cheap mini- drones that were expendable, and generally shunning larger drones."

The global military market remains dominated by the United States and Israel. But new players such China and Turkey are challenging the United States in its traditional markets. Their drones enjoy a price advantage and are sold without Washington's intrusive requirements. "We predict that the US will account for 81% of total military worldwide RDT&E spending on UAS technology over the next decade and 59% of military procurement," said Teal Group senior analyst Steve Zaloga. Much of the US RDT&E is intended to develop the next generation of systems that can survive in contested airspace.

UAV Payloads

The 2023/2024 study also provides forecasts for a wide range of UAV payloads, including Electro-Optical/Infrared Sensors (EO/IR), Synthetic Aperture Radars (SARs), SIGINT & Electronic Countermeasures (ECM) Systems, and C4I Systems. These markets are forecast to grow in overall value from $6.2 billion in FY23 to $14.0 billion in FY32, worth $93 billion in total (combined RDT&E and Procurement). Teal Group forecasts rapid growth in all sensor markets, but especially in SIGINT & ECM – now forecast to increase from $1.8 billion in FY23 to $4.8 billion in FY32 with an 11.4% CAGR – and, surprisingly, in EO/IR, forecast to rise from $1.6 billion in FY23 to $4.8 billion in FY32 with a 12.9% CAGR.

For most sensor types, the largest market will be for stealthy classified UCAVs (Unmanned Combat Aerial Vehicles), to be worth $8.0 billion for radars alone, with a 18.4% CAGR from FY23 to FY32. The fastest growth will be for UCAVs and for VTOL (Vertical Take-Off and Landing) tactical UAVs – including the US Army's FTUAS (Future Tactical Unmanned Aerial System) program which aims to develop a follow-on to the RQ-7 Shadow. Sub-tactical scale UAV have proliferated already, so growth rates will be a bit lower.

This study breaks out tens of billions of dollars of estimated classified spending and future follow-on sensor programs with detailed annual forecasts. Dr. David L. Rockwell, Teal Group's lead electronics analyst, states "it is important to forecast these programs as they make up an increasing share of the available market, even though they are in no public DoD documents and are not monetized in any online sources." He notes that "speculative 'available' forecasts – totaling almost $60 billion for sensors through FY32 – are intended to give early warning of programs that are not yet in DoD budgets."

Company Profiles

The 2023/2024 study also includes UAS Company Profiles that reflect "a gradual shift away from hardware to advanced technology and systems, with counter drone capabilities accelerating in focus and development," said Tom Zoretich, Teal Group's Director of Corporate Analysis. He further stated, "Companies are watching drone application in the Ukraine War and looking to incorporate learnings into future platform upgrades and enhancements."

Teal Group is an aerospace and defense market analysis firm based in Fairfax, Virginia, USA.

SOURCE Teal Group