As global economies brace for a Second Great Depression – or at let a bitter recession, the defence industry in general offers a safe haven with prospects for defence electronics being particular healthy.
That`s the view of Forecast International. Its 2009 “The Market for US Defence Electronics” report sees a market worth “at least” $59.512 billion from 2009 to 2018.
On an annualized basis, however, the market shows a steady decline over the next 10 years, from a high of $8.484 billion in 2009 to $4.945 billion in 2018. This represents a 10-year drop of approximately $3.538 billion, or 41.707% from the market high.
“As America, and most of the world, continues in an economic tsunami of a recession, fears will remain high and stock markets low. Fortunately, one safe haven, for the time being, will be the defence market, with defence electronics being particular healthy,” says author Richard Sterk.
“If the US government is going to fund projects to stimulate the economy, investing defence is the way to go and upgrading electronics (technology) is always money well spent.”
Leading the market will likely be small ticket items (relatively speaking), such as electro-optical (EO) night vision and thermo imaging weapon sights, have leaped into production owing to a proven edge on the battlefield. Likewise, other EO sensors have seen a surge in procurement.
“Also being pushed for development and production are systems designed for use in network-centric warfare – systems that connect as many information systems together as possible to allow maximum flow of information to soldiers in the field,” said Sterk.
The top five defence electronics companies in the US continue to draw from the upper echelons of corporate America. As determined by the sampling within this study, the top five are Northrop Grumman, Raytheon, Lockheed Martin, ITT, and General Dynamics.
“Of course, the largest impact on spending in the near future will to be the wars in Afghanistan and Iraq, as overall levels of defence spending will gradually decrease as violence declines and the pace of operations winds down, Sterk said adding “It must also be remembered that the military will still require significant recapitalisation funds to replace lost or damaged equipment even after combat troops are withdrawn.”