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Defense Market Growth Potential: How Will Market Size Change Through 2030?
The defense market has experienced significant expansion recently. Forecasts indicate its size will increase from $506.9 billion in 2025 to $542.72 billion in 2026, demonstrating a compound annual growth rate (CAGR) of 7.1%. Historically, this growth can be ascribed to several factors, including escalating geopolitical tensions leading to greater acquisition of air-, sea-, and land-based defense equipment, the widespread implementation of military modernization initiatives in key countries, an uptick in the need for supplementary systems like radar, sonar, and satellites, augmented spending on maintenance, repair, and overhaul (MRO) for existing defense platforms, and continuous technological progress enhancing the performance and integration of multi-domain defense systems.
The defense market is projected to experience substantial expansion in the coming years. By 2030, its value is anticipated to reach $739.43 billion, exhibiting a compound annual growth rate (CAGR) of 8.0%. This growth over the forecast period is primarily driven by factors such as an expected increase in defense expenditures for developing next-generation platforms, the wider integration of autonomous and unmanned defense systems across various domains, significant progress in space-based defense capabilities, including military satellites, a heightened emphasis on integrated command-and-control and network-centric warfare systems, and the broadening of defense MRO and support services due to larger and aging global fleets. Key trends during this period are projected to encompass a greater demand for multi-domain defense platforms, the continued modernization of land, air, and naval fleets, an increasing concentration on long-range strike and missile defense systems, the extension of defense maintenance, repair, and overhaul (MRO) services, and the reinforcement of domestic defense manufacturing capabilities.
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Defense Market Development Factors: Which Trends Are Supporting Demand?
The rise in defense expenditures is anticipated to propel the defense market’s expansion moving forward. Defense expenditure represents the financial resources a state allocates to establish and maintain an armed force or other essential defense methods. This spending funds the defense industry, encompassing the design, manufacturing, and maintenance of military equipment. For instance, in April 2024, the Stockholm International Peace Research Institute (SIPRI), a Sweden-based non-government organization, reported that global military spending reached $2,443 billion in 2023, reflecting a 6.8% increase in real terms from 2022. Therefore, the growing defense expenditure is driving the growth of the defense market.
Defense Market Segment Breakdown: Which Categories Generate The Most Revenue?
The defense market covered in this report is segmented –
1) By Type: Air-Based Defense Equipment, Sea-Based Defense Equipment, Land-Based Defense Equipment, Defense Equipment Maintenance, Repair And Overhauling Services, Defense Support And Auxiliary Equipment
2) By Operation: Autonomous Defense Equipment, Manual
3) By Platform: Airborne, Land, Naval
Subsegments:
1) By Air-Based Defense Equipment: Combat Aircraft, Unmanned Aerial Vehicles (UAVs) or Drones, Air Defense Systems, Helicopters, Surveillance And Reconnaissance Aircraft
2) By Sea-Based Defense Equipment: Naval Vessels, Amphibious Assault Ships, Maritime Patrol Aircraft, Naval Weapon Systems, Mine Countermeasure Vessels
3) By Land-Based Defense Equipment: Armored Vehicles, Artillery Systems, Infantry Fighting Vehicles (IFVs), Military Trucks and Logistics Vehicles, Ground-based Missile Systems
4) By Defense Equipment Maintenance: Scheduled Maintenance, Unscheduled Maintenance, Technical Support Services, Logistics Support, Fleet Management
5) By Repair and Overhauling Services: Component Repair, Engine Overhaul, Avionics Repair, Structural Repair, Systems Integration and Testing
#Defense Market Growth Trends: What Is Influencing The Future Outlook?
Major companies in the air-based defense equipment manufacturing market are increasingly investing in the development of autonomous fighter jets. These self-flying aircraft do not require human pilots and can operate for extended durations. Autonomous jets come equipped with sensors to detect potential threats and can process a greater amount of information simultaneously. These aircraft are well-suited for collecting intelligence on adversaries, disrupting enemy aircraft’s electronic systems, and neutralizing other airborne dangers. Following this trend, in October 2024, Leonardo, an Italy-based multinational company specializing in aerospace, defense, and security, introduced BriteStorm. BriteStorm is engineered to provide stand-in jamming capabilities, acting as an airborne disruptor against various enemy threats. Its adaptable design allows for installation on multiple platforms and compatibility with diverse UAV types, offering militaries flexibility in deployment. Furthermore, its digital deception techniques can counter advanced radar systems by generating false aircraft signatures, thereby complicating adversaries’ efforts to identify actual threats.
Defense Market Key Players And Strategic Industry Positioning
Major companies operating in the defense market are Lockheed Martin Corporation, Raytheon Technologies Corporation, Northrop Grumman Corp, General Dynamics, The Boeing Company, BAE Systems plc, L3Harris Technologies, Leonardo SpA, Thales Group, Huntington Ingalls Industries Inc, Excel Laser Technology Private Limited, Prakash Laser, Infrared Optics, Kalaimakal Systems Private Limited, Baoding Triangel Rsd Electronics Technology Limited, Beijing Be-Better Technology Co., Ltd, Shanghai Zhangjiagang Baorui Machinery Co., Ltd, Guangzhou Blixun Electronics Co., Ltd, Xi’an Lonn M&E Equipment Co., Ltd, General Atomics Aeronautical Systems, Elbit Systems Ltd, AeroVironment, China South Industries Group (CSGC), China Aerospace Science and Industry Corporation (CASIC), China North Industries Group Corporation Limited (Norinco), Changhe Aircraft Industries Corporation, Shenyang Aircraft Corporation, Babcock International, BMARC, BMT Group, CBI Explosives Industry Group, HSE Explosives, Chemring Energetics UK Ltd, Orica UK Ltd, CES Advanced Composites UK Ltd, Conjay Collectors Ammunition Company Ltd, Societe Suisse des Explosifs, SSE Group, BIAZZI SA, Almaz-Antey, United Aircraft Corporation, Tactical Missiles Corporation, Russian Helicopters, Uralvagonzavod, United Shipbuilding Corporation, Advanced Composites Solutions, AEL Sistemas, Aeromot, Agrale, Airship do Brasil, Telespazio, ARSAT, Airbus SE, Saudi Arabian Military Industries (SAMI), Advanced Electronics Company, Abu Dhabi Ship Building (ADSB), DragonFly Aerospace, Armscor, Atlantis Diesel Engines, Atlas Aircraft Corporation, OneWeb
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Defense Market Geographic Analysis: Where Is Demand Growing The Fastest?
Asia-Pacific was the largest region in the defense market in 2025. Western Europe is expected to be the fastest growing region in the forecast period. The regions covered in the defense market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
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Wasay has over a decade of experience in market research, data modelling, and analytics, with prior experience at GlobalData and Decision Tree Consulting Services. At The Business Research Company , he leads research operations across syndicated studies, customized consulting engagements, and the Global Market Model platform. His professional experience includes supporting organizations such as Boston Consulting Group, KPMG, and Ernst & Young. Wasay holds a degree in Electronics and Communications Engineering, postgraduate management qualifications from International Management Institute Belgium and Indian School of Business and Entrepreneurship, and completed the Integrated Program in Business Analytics from Indian Institute of Management Indore.
