Global Aerospace & Defense Market to Reach $1.98 Trillion by 2020, Experiencing Scorching Growth Rate of 3.6% in 2019

Strategic Insights -

The global aerospace and defense market is experiencing a significant upswing in defense spending, led by the resurgence of great power competition amongst leading geopolitical powers. The realignment of U.S. defense spending, with a renewed focus on competing with near-peer adversaries, has accelerated the pace of recapitalization of ageing equipment. The focus has been on equipment upgrade, modernization, and recapitalization, apart from capabilities revitalization and increased R&D outlays towards development of next-generation technologies.

Key Takeaways:

  • The global defense spending has grown at a scorching pace since the onset of great power competition, reaching $1.98 trillion in 2020.
  • The growth rate of defense spending is pegged at 3.6% for 2019 and 2.6% for 2020, almost paralleling the Cold War-era highs.
  • The Middle East, Eastern Europe, and the Asia-Pacific regions are the epicenter of ongoing geopolitical turbulence, driving demand for military equipment and arms imports.
  • The Asia-Pacific region is projected to take the lead in terms of projected defense spending growth rate, with most global industry OEMs keenly eyeing the region for growth opportunities.
  • The COVID-19 pandemic is likely to put significant pressure on government finances, but its impact on defense spending is expected to be limited and confined to non-strategic defense programs.
  • Most strategic and long-term defense programs, as well as technology development efforts, are likely to be sustained going forward.
  • The global defense budgetary expenditure is expected to grow at a compound annual growth rate (CAGR) of 3.6% from 2021 to 2025.
  • The defense spending levels across key geographic regions are expected to reach $1 trillion by 2025, with the Asia-Pacific region accounting for the highest share.

Statistics:

  • Global defense spending reached $1.98 trillion in 2020.
  • The growth rate of defense spending is pegged at 3.6% for 2019 and 2.6% for 2020.
  • The Asia-Pacific region accounted for 33.4% of global defense spending in 2020.
  • The Middle East and Eastern Europe accounted for 20.5% and 13.4% of global defense spending, respectively, in 2020.
  • The global defense budgetary expenditure is expected to grow at a CAGR of 3.6% from 2021 to 2025.

Sources:

  • "Global Aerospace & Defense Market - 2021-2025 - Key Trends, Strategic Insights, Growth Opportunities" report, ResearchAndMarkets.com
  • Research and Markets, Laura Wood, Senior Manager, press@researchandmarkets.com
  • U.S. Department of Defense, various reports and statements
  • International Institute for Strategic Studies, various reports and statements