Aerospace and Defense Market Size, Share, Growth, Analysis 2023-2030 (2024)

Aerospace and DefenseIndustry Prospective:

The global aerospace and defense market size was worth around USD 750 billion in 2022 and is predicted to grow to around USD 1388 billion by 2030 with a compound annual growth rate (CAGR) of roughly 8.2% between 2023 and 2030.

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Aerospace and Defense Market: Overview

The industries that design, develop, produce, and maintain airplanes, spacecraft, missiles, and military systems are referred to as aerospace and defense industries. These sectors are essential to the evolution of technology, global economic growth, and national security. While the defense industry is mostly concerned with military capabilities and national security, the aerospace sector has both civilian and military uses. The aerospace and defense market is driven by several factors including growing air travel demand, technological advancements, increasing space activities, rising military modernization and increasing investment in the aerospace and defense industry.

Key Insights

• As per the analysis shared by our research analyst, the global aerospace and defense market is estimated to grow annually at a CAGR of around 8.2% over the forecast period (2023-2030).
• In terms of revenue, the global aerospace and defense market size was valued at around USD 750 billion in 2022 and is projected to reach USD 1388 billion, by 2030.
• The growing investment in the aerospace and defense sector is expected to drive the revenue growth of the aerospace and defense industry.
• Based on the type, the defense segment is expected to hold a prominent market share over the forecast period.
• Based on the operation, the autonomous segment is expected to grow at the fastest rate over the projected period.
• Based on the components, the weapon system segment is expected to capture a significant market share during the forecast.
• Based on region, North America is expected to dominate the market during the forecast period.

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Aerospace and Defense Market: Growth Drivers

Increasing air travel demand drives market growth

A greater demand for air travel is a result of the expanding global economy and growing middle class, which drives the rise of commercial aviation and the requirement for new aircraft. For instance, according to the International Civil Aviation Organization estimates, Over the next 20 years, there will be an average annual rise in demand for air travel of 4.3%.

By 2036, the aviation sector will have generated $1.5 trillion in GDP and 15.5 million direct employments for the global economy if its current development trajectory is maintained. Upon accounting for the effects of international tourism, these figures may increase to 97.8 million employment and $5.7 trillion in GDP. Over 200,000 aircraft a day are anticipated to take off and land worldwide by the middle of the 2030s. Thus, the aforementioned statistics are propelling the aerospace & defense industry over the projected timeframe.

Aerospace and Defense Market: Restraints

Emission and environmental impact hampers market growth

The aerospace sector has problems in developing more environmentally friendly and sustainable technology due to increased scrutiny of emissions and environmental effects. For instance, according to the International Energy Agency, with its growth in the last several decades outpacing that of rail, road, or shipping, aviation accounted for 2% of the world's energy-related CO2 emissions in 2022. Following the Covid-19 epidemic, demand for international travel has recovered, and as a result, aircraft emissions in 2022 reached about 800 Mt CO2 or 80% of the level before the pandemic.

To get on track with the Net Zero Emissions by 2050 (NZE) Scenario, numerous technical measures about low-emission fuels, upgrades to airframes and engines, operational optimization, and demand restraint solutions are required to halt the growth in emissions and ultimately reduce them this decade. Therefore, the growing emissions and environmental impact might be a major restraint for the market growth over the forecast period.

Aerospace and Defense Market: Opportunities

Growing defense spending provides a lucrative opportunity for market growth

The growing defense spending in the countries like US, China, and India is expected to propel the market growth during the forecast period. According to rankings, the US is the top defense exporter and producer in the world. US military spending rose to USD 801 billion from USD 778.23 billion the year before, an almost 2.9% rise. With 38% of all military spending last year, the United States remained the largest spender worldwide.

The Department of Defense (DoD) has a budget authorization of about USD 722 billion for FY 2022, up USD 17 billion from USD 705 billion in 2020. The President's budget request for FY 2023 called for USD 773 billion for the DoD. The budget is largely focused on innovations to bolster the nation's competitive edge and upgrade capabilities in the air, sea, and ground warfighting domains.

Aerospace and Defense Market: Challenges

Regulatory compliance and technological concerns pose a major challenge to market growth

Adherence to strict safety and security protocols, particularly in the aviation domain, can provide obstacles for enterprises, hence impacting the schedules and expenses associated with product development. Furthermore, complicated and time-consuming procedures are frequently involved in the development of cutting-edge aerospace and defense technology, which causes delays and cost overruns. Thus, this is expected to pose a major challenge to the aerospace and defense market over the projected timeframe.

Aerospace and Defense Market: Segmentation

The global aerospace and defense industry is segmented based on the type, operation, component, and region.

Based on the type, the global aerospace and defense market is bifurcated into aerospace and defense. The defense segment is expected to hold a prominent market share over the forecast period. The segment expansion is attributed to the growing defense funding across the globe. For instance, according to the Stockholm International Peace Research Institute, in real terms, global military spending increased by 3.7% in 2022 to a record $2240 billion. Global expenditure increased by 19% between 2013 and 2022, and it has been rising annually since 2015. One of the main reasons for the increase in spending in 2022 was Russia's invasion of Ukraine. The year saw a 13% rise in military expenditures in Europe, the biggest yearly increase in overall European spending since the conclusion of the Cold War. Significant increases in spending by Russia and Ukraine were primarily responsible for the remarkable gain, although several other European nations also increased their military budgets in 2022. Parts of Asia and Oceania had risen in spending, which also aided in the world economy in 2022.

Based on the operation, the global aerospace and defense industry is categorized into autonomous and manual. The autonomous segment is expected to grow at the fastest rate over the projected period. An increasing trend in the aerospace and defense industry is the integration of autonomous technology, which is bringing about revolutionary improvements in several domains. In this sense, "autonomous systems" refers to the capacity of automobiles, unmanned aerial aircraft, and other platforms to function without direct human supervision.

For instance, in September 2023, at DSEI 2023, the Monaco-based surveillance and infrastructure security expert MARSS announced the introduction of NiDAR X-Scout, an expeditionary counter-unmanned aerial vehicle (UAV) system that can be quickly deployed. NiDAR X-Scout is a transportable, adaptable, and readily deployed C-UAV system that has been designed around the Toyota Land Cruiser flatbed, a popular pick-up vehicle in the Middle East, according to MARSS. When transported by one of these vehicles or even dropped from the air, NiDAR X-Scout may be deployed anywhere and used remotely for over a week as a standalone C-UAV unit.

Based on the components, the global aerospace and defense industry is segmented into Weapon System, Fire Control System, Command and Control System and Others. The weapon system segment is expected to capture a significant market share during the forecast period owing to the growing concern for national security.

Aerospace and Defense Market: Report Scope

Regional Analysis

North America is expected to dominate the aerospace and defense market during the forecast period

North America is expected to dominate the aerospace and defense industry during the forecast period. The regional growth of the market is attributed to the presence of major players particularly in the US. Among the leading companies in the US aerospace and military sector are Raytheon Technologies Corporation, General Dynamics Corporation, Lockheed Martin Corporation, Honeywell International Inc., and Boeing Company. Companies need to make sure their product portfolios reflect the changing needs of end consumers in the context of the legislation. The distribution of upgrade contracts to improve the capabilities of the fleet of active aerial assets already in use also has a major impact on the market.

The need for cutting-edge aircraft, unmanned aerial vehicles, and satellites has increased as a result of the United States' active participation in international politics. Moreover, firms are heavily spending on the R&D of complex product offerings to secure long-term contracts and increase market dominance. Additionally, ongoing research and development has promoted technical developments in theaerospace and military market's platforms, related goods, and solutions.

Aerospace and Defense Market: Competitive Analysis

The global aerospace and defense market is dominated by players like:

• Northrop Grumman Corp
• General Dynamics
• Raytheon Technologies Corporation
• Airbus Group SE
• The Boeing Company
• Lockheed Martin Corporation
• Raytheon Co
• Bae Systems plc
• General Electric Company
• Safran SA

The global aerospace and defense market is segmented as follows:

By Type

• Aerospace
• Defense

By Operation

• Autonomous
• Manual

By Component

• Weapon System
• Fire Control System
• Command and Control System
• Others

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa