Global Defense Budget Reaches US$1.1 Trillion Due to Demand for Nation
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Global Defense Budget Reaches US$1.1 Trillion Due to Demand for National Security Priorities

  • "The average procurement budget size of respondent companies is US$71.3 million. A total of 31% identified their global annual procurement budget to be less than US$250,000, while 16% plan budgets between US$1-US$10 million. The average size of global annual procurement budgets among defense contractors is US$121.3 million, compared to US$41.2 million for other service providers."
Amsterdam - The newly published Research report "Global Defense Supplier Industry Outlook Survey 2011-2012: Industry Dynamics, Market Trends and Opportunities, Expenditure and Procurement Strategies" states that 50 % of defense contractors and service providers are 'more optimistic' about their company's revenue growth over the next 12 months in comparison to the previous 12 months. The defense global budget is expected to reach US$1.1 trillion based on the expected increase in demand for national security priorities. The report is available on ASDReports.com.

The decline in the global economy has had a profound effect on respondents' sales. Recent contract wins from developing regions such as India, Iran and China are expected to offset defense budget cuts by developed nations. Defense suppliers consider India to be the most promising emerging market, whereas defense contractors and service providers consider India and the Middle East as two of the most important markets for growth. For 2010-2011 the Indian defense expenditure has risen by 8.13% from the previous year and there are plans to establish a defense modernization program, which would make it the second largest defense supplier in Asia-Pacific. Across the Middle East it is estimated there will be 14% growth over the next 5 years on defense expenditure. In terms of military expenditure Saudi Arabia and the United Arab Emirates (UAE) are considered to be the leading countries in the region.

Due to federal deficits and economic instability in developed markets, many leading defense contractors will face 'pricing pressure' in the coming years. To acquire and maintain buyer business, defense suppliers are to concentrate on new product development, improved customer service and provide support for generating new business. Defense contractors predict that the introduction of 'new products and services' into the market is the key expected change in business structure for 2011. Of all respondents, 59% of defense contractors and 46% of other service providers are optimistic regarding an increase in merger and acquisition activities in 2011.

Defense contractors and service providers are optimistic about procurement expenditure in the next 12 months. The report states the average procurement budget size of respondent companies is US$71.3 million. The average size of global annual procurement budgets among defense contractors is US$121.3 million, compared to US$41.2 million for other service providers.

More information on this new study can be found on ASDReports.com, follow the link to the study named 'Global Defense Supplier Industry Outlook Survey 2011-2012: Industry Dynamics, Market Trends and Opportunities, Expenditure and Procurement Strategies' in this article.



Source : ASDReports - Market Research

Published on ASDNews: May 19, 2011

 

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