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Ammunition market to increase at a CAGR of 0.66% through 2016

Press Release   •   Nov 05, 2013 11:31 GMT

The ammunition market has been forecast to increase at a compound annual growth rate (CAGR) of 0.66% through 2016, driven by the increase in global defence budgets and the increase in R&D.

However, the end of conflict and withdrawal of troops from Afghanistan, the austerity measures undertaken by the west, troop size reduction by many western powers and their increased reliance on simulators to train their troops means that the ammunition market is set to stay relatively stable in value terms.

The global ammunition market has seen considerable growth during the past decade due to the recent conflicts which has served as a growth factor for the ammunition industry.

Army modernisation programs by developed and developing nations alike are expected to drive the market. Moreover, the need to maintain professional armies and the training imparted in doing so, has led to the growth in demand for training ammunition's.

The global defence industry is investing extensively in R&D activities. This has resulted in the development of technologies that can help augment the endurance and survivability of army weapons in hard atmospheric conditions.

As a result of emerging technologies and changing environments, DODs of different countries are investing in new and improved ammunition. For instance, there is a rise in the demand for guns that require low maintenance and do not become heated up.

The decrease in defence budgets in the majority of western countries is expected to impact the ammunitions market. This has forced the ammunition industries in the west to look for other potential markets to offset the decrease in demand.

A key challenge currently facing the ammunition market is the increase in the prices of raw materials. The rise in the raw material prices has resulted in pricing pressure for ammunition manufacturers and they are forced to pass on the increased cost to the customers.

Major players currently dominating the ammunition market include Alliant Techsystems Inc., BAE Systems plc, General Dynamics Corp., and Nexter Group.

For more information on the ammunition market, see the latest research: Defence Market Research

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