U.S. Aerospace & Defense Market Size & Market Share Analysis – Growth Trends & Forecasts (2023 - 2028)
The U.S. Aerospace and Defense industry is segmented by Commercial Aviation and General Aviation, Military Aircraft and Systems, Unmanned Aircraft Systems, and Space Systems and Equipment. In addition, the report provides a market forecast presented in millions of US dollars.
U.S. Aerospace & Defense Market Analysis
The U.S. aerospace and defense market is projected to grow and register a CAGR of about 2.37% during the forecast period.
The COVID-19 pandemic has had a negative impact on the U.S. aerospace and defense market. The onset of the pandemic led to a downturn in the commercial aviation sector in the United States, with many flights suspended and a decline in passenger air traffic negatively impacting aircraft demand. The decline of the pandemic will lead to a gradual increase in the number of air travel, which will lead to an increase in the demand for new aircraft, which will lead to the growth of the market during the forecast period.
However, the defense sector is expected to remain stable and even grow as the United States has not cut its defense budget and remains committed to maintaining its military capabilities. However, due to widespread supply chain disruption, some defense programs may face marginal cost increases and delays in the short term.
The U.S. aerospace and defense sector is one of the largest in terms of infrastructure and manufacturing activities. The market is primarily driven by investment in the AD sector and is supported by the growing demand for AD sector products from both commercial and military end-users. The market is also supported by the presence of leading industry players in the U.S., whose manufacturing and R&D capabilities support the industry's growth.
Increasing defense spending, stimulating R&D and production
The United States is considered the world's leading manufacturer and exporter of defense products. U.S. military spending increased nearly 2.9% last year to reach $801 billion from $778.23 billion in the previous year. The United States continued to be the largest military contributor last year, accounting for 38% of global spending.
For fiscal year 2022, the Department of Defense (DoD) budget authority is approximately $722 billion, up $17 billion from $705 billion in 2020, while the President's fiscal year 2023 budget request was $773 billion for the Department of Defense. The budget primarily focuses on modernizing capabilities in the air, sea, and land combat domains, as well as innovating to strengthen the country's competitive advantage.
Over the past half-decade, about 1,000 helicopters have been delivered to the United States, of which the IO-540-AE1A5, Arriel2D and Arrius 2R were the most popular engines installed on 121, 112 and 100 helicopters, respectively.
The United States is one of the world's largest investors in FDI and a leading beneficiary of FDI. In 2020, Lockheed Martin completed construction of its $350 million satellite manufacturing plant, located on the company's Waterton Canyon campus near Denver. As the U.S. intends to maintain its technological superiority over rival powers in terms of deployed platforms and airborne weapons, there is expected to be a significant influx of cash resources in the coming period, leading to the growth of the U.S. aerospace and defense market.
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The space sector will experience the highest growth during the forecast period
Space capabilities provide the United States and its allies with unparalleled advantages in national decision-making, military operations, and national security. While the most recent space exploration efforts have been undertaken by several private companies, discussions continue about creating the Space Force as the sixth branch of the U.S. military. This is expected to attract public sector investment in space technology over the forecast period.
The creation of the U.S. Space Command is likely to benefit both the U.S. Department of Defense (DoD) and the U.S. aerospace and defense industry. In addition, the U.S. Space Command, which oversees space operations using personnel and assets managed by the Space Force, is likely to support the company's AD in accelerating investment in innovative technologies and capabilities.
Space exploration is expected to continue to develop and grow during the forecast period due to declining launch costs and advancements in technology. Such factors are expected to strengthen the outlook for the market, which has been in the spotlight during the forecast period.
U.S. Aerospace & Defense Industry Overview
Well-known players in the US aerospace and defense market are General Dynamics Corporation, Honeywell International Inc., Lockheed Martin Corporation, Boeing Company, Raytheon Technologies Corporation, and others.
In the face of changing regulations, companies must align their product portfolio with the changing requirements of end users. The dispersion of modernization contracts to expand the capabilities of the current fleet of active aircraft also has a significant impact on the market. The active role of the United States on the global political front has led to an increase in demand for modern aircraft, UAVs and satellites.
Moreover, in order to secure long-term contracts and increase market share, players are investing heavily in the research and development of complex product offerings. In addition, continuous research and development is driving technological advancement in platforms and related products and solutions in the U.S. aerospace and defense market.
U.S. Aerospace & Defense Market Leaders
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General Dynamics Corporation
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Honeywell International Inc.
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Lockheed Martin Corporation
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The Boeing Company
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Raytheon Technologies Corporation
*Disclaimer: Major players are sorted in random order
U.S. Aerospace & Defense Market News
In December 2022, the United States announced that it had awarded defense contracts to various companies, including a $1 billion contract with Lockheed Martin Corporation. The contract seeks to procure the materials, parts, components, and effort over the extended period needed to maintain the on-time production and delivery of 118 F-35 aircraft to the Air Force, Marine Corps, non-U.S. Department of Defense Navy, and foreign military customers.
In November 2022, the U.S. Army announced that it had awarded a 5-year IDIQ contract worth up to $1.498 billion to Kongsberg Defense Aerospace AS to continue delivering the Common Remotely Operated Weapon Station (CROWS).
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