Submarine market worth $106 billion over next decade – FI

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Forecast International on Monday estimated that 111 submarines worth $106.7 billion will be sold globally over the next decade.

The company’s “The Market for Submarines” analysis estimates sales from 2011 through to 2020 and values the average price of a submarine at $960 million. This represents a rise in the cost of submarines, caused by growing complexity and the increasing use of air-independent propulsion, which make diesel-electric boats relatively expensive.

Warships analyst Stuart Slade said that “over the long term, constant shifts in the structure of construction costs and the steadily growing number of countries that are interested in nuclear-powered submarines mean that the average cost of submarines will continue to increase on an annual basis.”

In a recent statement Forecast International said that the submarine market is divided into three subsectors. The first is the market for ballistic missile submarines, or SSBNs. There are currently 13 such submarines on order or under construction and these represent 11.7% of the total market in terms of numbers but are valued at $26 billion, representing 24.5% of the total value of the market. The average unit cost of the SSBNs is $2.0 billion, Forecast International said.

In the long term, both the British and US navies are evaluating possible successors to their existing SSBN units, the Vanguard and Ohio classes, respectively. The British program is designated SSBN(R) or Successor; the US program, SSBN(X). Both navies have elected to stay with the traditional SSBN concept, although both SSBN(X) and SSBN(R) will carry significantly fewer missiles than their predecessors did. Overall, the SSBN sector looks healthier now than it has in many years, Forecast International added.

The second sector is the market for nuclear-powered attack submarines, or SSNs. The projections show sales of 27 such submarines, representing 24% of the total number and valued at $48.32 billion. This represents 45.7% of the total funding for all submarines over the forecast period. The average unit value of the SSNs covered in this survey is $1.79 billion. Interestingly, the differential in value between SSNs and SSBNs has fallen precipitously over the last few years.



The final sector is the market for SSKs, or diesel-electric submarines. From 2011-2020, 71 of these boats will be built, representing 64 percent of the total. They are valued at $32.4 billion, representing 30.36% of the total expenditure on submarines from 2011-2020. A notable factor this year is that the average cost of diesel-electric submarines has increased to $456 million, Forecast International concluded.