Global military spending rises to $1.7 trillion [Infographic]

Belfast Telegraph

06/04/2016

Graphic shows global military expenditure from 1998 to 2015, and top spenders in 2015Graphic shows global military expenditure from 1998 to 2015, and top spenders in 2015

Global military spending rose in 2015 to nearly $1.7 trillion, the first increase since 2011, driven by Middle East conflicts including the battle against Isis and the Saudi-led war in Yemen.

Global military spending rose in 2015 to nearly $1.7 trillion, the first increase since 2011, driven by Middle East conflicts including the battle against Isis and the Saudi-led war in Yemen.

@belfasttelegraph.co.uk

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Shifting Global Defense Market: Prospects and Challenges for US Defense Industries

By on February 11th, 2015

The global defense market is in the midst of a fundamental shift. Pressured by relatively slow economic growth and large debt burdens, Western governments’ defense spending is either stagnating or declining. For instance, US defense spending is anticipated to decline at an annualized 2.5% over the 10 years to 2020. On the other hand, geopolitical tensions in Asia and the Middle East, combined with the general shift in economic balance to the developing world, is forecast to cause non-NATO defense spending to increase at an annualized 4.2% to $1.0 trillion over the 10-year period.

As a result of this shift, the global defense industry is expected to increase their focus on non-western markets. For US defense contractors this trend provides an opportunity to offset weakening domestic demand. For instance, exports share of the US Tank & Armored Vehicle Manufacturing industry’s (IBISWorld report 33699b) revenue is projected to climb from 9.3% in 2010 to 26.7% in 2020. On the other hand, as non-NATO nation’s share of global defense spending increases, so will their leverage with US-based contractors. Therefore, in order to win orders, defense exporters will have to offer greater “offsets”, which include sharing technological knowhow, manufacturing products within export markets and setting up joint ventures with importing nation contractors.

Moreover, not all defense market will be open for US companies. For instance, the large and rapidly increasing Chinese and Russian markets are for the most part closed off to foreign contractors. Combined with increasing “offsets”, this will mean that US contractors’ share of the global defense industry will also slowly start to decline. US defense companies’ reliance on the Middle East export market may also end up hurting them as lower oil and gas prices may slow the pace of the region’s rise in defense spending. Nevertheless, in the long-run, the shift in global defense spending will force domestic defense firms to alter their strategy to one that tailors more to international markets. Companies that fail to do so will find themselves out-competed in an increasingly globalized defense market.

Published by @ibisworld.com

See related post:

This graphic shows how the US defence budget dwarfs the rest of the world’s

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