United States defence market: Budget to reach $610 billion by 2017

Press Release   •   Feb 22, 2013 14:50 GMT

The United States defence market is the largest in the world, with a total defence budget in 2012 of around $645.7 billion. Defence expenditure is driven mainly by the desire by to modernise existing weapon systems, and the acquisition of advanced defence equipment. A high level of military spending has made the United States defence market an extremely lucrative sector with many opportunities. Despite this, recent years has seen the United States scale back on the defence budget due to the increasing debt burden associated with the financial crisis.

The US defense budget (including OCO funding), which declined at a CAGR of -0.77% during the review period, is expected to register a CAGR of -0.12% over the forecast period to reach US$611 billion by 2017. Furthermore, defense expenditure as a percentage of GDP is also estimated to decline, from an average of 4.6% during the review period to an average of 3.4% over the forecast period.

Nuclear threat, modernization initiatives, arms race with China and Russia, and the protection of allies are expected to drive defense spending. The US perceives a potential nuclear threat from Iran and North Korea through their acquisition of long-range ballistic missiles, and the tension between the US and North Korea further increased in November 2010, when the US criticized the attacks carried out by North Korea on South Korea. Moreover, the nuclear threat from North Korea increased as North Korea announced its plans to carry out further long-range rocket launches and nuclear tests to fight against the US in January 2013.

For more information on the United States defence market, please click here: United States Defence Market

For more information on the Defence market, please click here: Defence Market issues news updates and report summaries covering all major industries and sectors. The service provides additional client monitoring and timely alerts to breaking industry and sector news leading the day's business headlines. News articles, written by our staff, contain additional analyst insight, providing value added insight for our readers. News updates and real-time alerts on newly-released market reports are also available from our Facebook page, Twitter feed @CandMResearch and RSS links. We also welcome inquiries from business journalists and the news media.