The North American missiles and missile defense systems market is anticipated to register a CAGR of more than 6% during the forecast period.
- On account of the profound changes in the international strategic landscape, the configuration of the international security system has been undermined by the growing hegemonism, unilateralism, and power politics that has fueled several ongoing global conflicts. Military powerhouses, such as the United States and Canada, have been focused on augmenting their military firepower and defensive capabilities. To ensure combat readiness of existing defense systems, several weapon modernization programs are currently underway to effectively upgrade the capabilities of the regional armed forces for effectively responding to security threats and accomplish urgent, critical, and dangerous strategic missions.
- However, the market may be deterred by the design challenges faced by system integrators to incorporate advanced features in their product portfolio without compromising on the payload capacity and range of a missile delivery platform. Designers are also required to ensure the availability of sophisticated integrated features and cross-compatibility with the advanced navigation sensors and subsystems from other system manufacturers, to develop a fully operational missile defense system, hence, rendering a complex outlook to the overall system design. Furthermore, the rapid technological disruption may also result in a feature under development being rendered obsolete even prior to integration into the system, escalating the financial risks for the market players.
Key Market Trends
Enhanced Defense Expenditure to Bolster Missile Development Programs
The defense budget of the major North American countries, such as the US and Canada, has witnessed a modest Y-o-Y growth over the last decade. The FY 2021 US Defense Budget request of USD 740.5 billion is a 6.85% increase over the sanctioned spending for FY 2020. The budget supports the irreversible implementation of the National Defense Strategy (NDS), which drives the Department of Defense's (DoD’s) decision-making in reprioritizing resources and shifting investments to prepare for a potential future technology-intensive conflict. It focuses on NDS priorities of nuclear deterrence recapitalization and homeland missile defense while refining the focus on the cyber and space warfighting domains and joint enablers for all operations in all domains: air, land, sea, space, and cyber. The US budget also entails the utilization of significant funds toward procuring several types of missiles and missile defense systems to counter and neutralize any sort of incoming threat to the nation’s sovereignty. Canada also plans to enhance its defense spending on account of the formalized two-percent GDP contribution toward defense modernization by all NATO member countries. At present, several projects for developing and inducting sophisticated military assets are underway, such as the F-35 program, the FFG(X) program, etc., which would subsequently drive the market players to develop advanced missiles and missile defense systems.
The US to Bolster Market Prospects During the Forecast Period
The United States was estimated to account for the largest share in the North American missiles and missile defense systems market in 2019. The United States is the leading user of such weapon systems in North America, and it is currently focusing on upgrading its existing armada. Moreover, the country is a key exporter and consumer of such equipment globally. The country caters to the demand of its military partners for advanced weaponry, such as guided rockets, ballistic missiles, armed UAVs, submarines, and surface warships. During 2014 and 2018, the country enhanced its share of total arms exports to account for 36% of the global arms sales. The need to ensure national security and achieve military dominance propelled the need for such a vehicle, thereby, driving the growth of the market in the region. With potential adversaries, such as Israel, Russia, and China, fielding an increasingly diverse, expansive, and modern range of regional offensive missile systems that can threaten the US forces, its allies, and partners, the US DoD is actively expanding and modernizing the US regional missile defenses. The country has been testing improved variants of both the Aegis SM-3 and SM-6 missiles, and fielding a new sensor, to significantly increase Aegis missile defense capabilities. The US DoD also plans to improve the capability and reliability of the Ground-based Midcourse Defense (GMD) system. The upgrades include equipping recently deployed GBIs with an advanced booster and a more capable Exo-atmospheric Kill Vehicle (EKV). Moreover, in October 2019, the Raytheon Company was awarded a USD 384 million contract by the US Army for the supply of six production representative units of the LTAMDS radar. LTAMDS is an advanced air and missile defense radar that is intended to eventually replace the current radar of the US Army’s Patriot defense system. The LTAMDS radar features the gallium nitride (GaN) technology that boosts the signal and improves sensitivity. Such developments are envisioned to drive the growth prospects of the market in focus during the forecast period.
The prominent players in the North American missiles and missile defense systems market are Raytheon Company, Lockheed Martin Corporation, Northrop Grumman Corporation, General Dynamics Corporation, BAE Systems PLC, and Kongsberg Gruppen ASA. Vendors are modifying their offerings to enhance current capabilities and introduce revolutionary features as a means to deliver high lethality to their system offerings. This helps introduce highly differentiated products at competitive pricing. Furthermore, a strategic collaboration between manufacturers is on the rise to develop sophisticated systems that conform to the design and performance specifications of the end-user defense forces. This is expected to benefit industry stakeholders during the forecast period.
Reasons to Purchase this report:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support