Preliminary research of Fairfield Market Research indicates a promising growth outlook for global precision guided munition market during the course of next few years.
Mounting Spending on Military Modernization Augurs Well Precision Guided Munition Market
Due to the rising demand for precision guided munitions to reduce collateral damage, the precision guided munition market has a lot of potential. It is anticipated to develop throughout the forecast period. Additionally, the expansion of military modernization initiatives, and the lightening of the logistical load are also significantly impacting the market performance. Another factor anticipated to fuel the market growth is the government's quick shift in investment trends and the rise in defense spending. Additionally, the introduction of new technologies, international conflicts, and various political uprisings are anticipated to spur the market during the forecast above. The market is expanding rapidly due to rising military spending. The term military refers to the armed forces of any nation that support domestic peace, and stability. The use of precision-guided munition is encouraged by increased military spending on modernization programs and the growing demand for such weapons to reduce collateral damage and boost lethality against the target. For instance, the Stockholm International Peace Research Institute (SIPRI) estimates that global military spending reached US$2 Tn in 2020, up 2.6% from 2019. As a result, rising military spending is anticipated to fuel the market growth.
Precision Guided Munition Market: COVID-19 Impact
The COVID-19 outbreak has not significantly impacted the precision guided munition market. The military sector faced several difficulties as a result of this proliferation. Overall, the market was not significantly impacted, but it did experience several economic crises after COVID-19. Due to reduced defense spending and contract delays brought on by insufficient financial resources, industrial growth is constrained. However, because some missile defense technology testing has been put off, precision guided munitions research and development has been put off. As a result, these factors significantly hindered market expansion at the start of COVID-19. Thus, it is anticipated that the market will grow during this time.
Defense Initiatives are Becoming more Important to Protect Countries from Range of Threats to Drive Precision Guided Munition Market Growth
The U.S. defense forces have a tactical combat advantage over any opponent in any weather due to the unmatched performance of the U.S. weapon systems. Including cash from the Base budget and the Overseas Contingency Operations (OCO) fund, the U.S. Department of Defense (DoD) has sought US$247.3 Bn for acquisition financing for Fiscal Year (F.Y.) 2020, with US$143.1 Bn going toward procurement and US$104.3 Bn going into RDT&E. The funding in the budget request represents a balanced portfolio approach to implementing the military force objective set forth by the National Defense Strategy. The Major Defense Acquisition Programs (MDAPs), which are acquisition plans that go beyond the US$247.3 Bn requested ceiling set by the Under Secretary of Defense for Acquisition and Sustainment, are funded with 83.9 billion dollars. Approximately the past five years, there have been over 1,200 more ballistic missiles, according to the Missile Defense Agency. Over 5,900 ballistic missiles exist outside the United States, the North Atlantic Treaty Organization, Russia, and China. The range of the U.S. deployed forces today includes hundreds of launchers and missiles. The precision guided munition market is thus driven by countries' rising demand for defense programs to defend against various threats.
Expanding Need for Precision Guided Weapons to Reduce Damage to Drive Precision Guided Munition Market Growth
The majority of countries follow the Law of Armed Conflicts (LOAC) and try to minimize collateral damage, such as the inadvertent destruction of civilian property and civilian fatalities (CIVCAS). The Circular Error Probability indicates a weapon's accuracy (CEP). Precision-guided munitions with a low CEP are crucial for minimizing casualties among civilians and collateral damage. No matter the mission, whether it is a high-intensity conventional battle or a low-intensity conflict operation like counterterrorism and counterinsurgency, causalities have major consequences for public opinion and policy. Precision-guided munitions aid in better decision-making and reduce collateral damage in today's highly digitalized world, preventing casualties in the aftermath. Additionally, because targets on battlefields are dispersed, mobile, and maneuverable, precision-guided munitions successfully neutralize threats. The factors driving the the growth of precision guided munition market will thus include the growing navigational aids, use of satellite networks, and drones to destroy high-value and far-off targets.
Strict Guidelines for Transfer of Weapons to Hamper Precision Guided Munition Market Growth
The state-owned defense organizations are subject to several federal and legislative laws and regulations, including exchange controls, the Foreign Corrupt Practices Act, import-export control regimes, and the Export Administration Act. Manufacturers of munitions are less likely to serve international clients because they are frequently prohibited from exporting their goods. This makes it difficult for munitions manufacturers to reach global precision guided munition market. Technology and weapon transfer were made worse when terrorist organizations gained access to various cutting-edge weapons, including anti-tank-guided weapons and high-tech land mines, which hampers the market growth.
Tactical Missiles Category to Dominate Precision Guided Munition Market as it is Launched from Air or Surface to Hit Targets
In 2021, the tactical missiles category held a sizable market share. Tactical missiles' extended range and powerful capacity to seriously affect the targets are ascribed to this development. These missiles can be equipped with nuclear warheads and navigational systems and can be launched from the air or the surface to hit targets wherever they are needed. As a result, the precision guided munition market will likely be supported in the anticipated time. Due to their low cost and lightweight characteristics, guided rockets are expected to experience moderate growth in the projected time. However, it is projected that the rockets' limited or short-range travel will be a problem for the segment's expansion. On the other hand, the guided rockets category is anticipated to grow at a significant rate. Due to its distinctive characteristic of lingering about the target and striking at a specific position, it is projected to accelerate at a tremendous rate. Furthermore, its rapid market penetration is probably helped by the low weight and partially automated mechanisms in the components that operate without human interaction.
GPS Category Dominates Precision Guided Munition Market as Demand Heightens
The global positioning system (GPS) category held the largest market share, and it is anticipated that it will continue to rule the precision guided munition market market during the forecast period due to the substantial demand. The targets are located using technology. The main reason for the increased demand for guided weapons is the quick coordination from lighting the target for aerial attack. However, it is anticipated that GPS technology will eventually replace semi-active laser guiding for military weapons. The use of GPS-enabled guided munition for long-range combat operations is projected to grow in popularity since it allows for detecting precise target locations and supplying real-time target movement. A significant growth rate is anticipated for the infrared-enabled guided munition due to its low cost and accurate location detection. Due to their small size and lightweight, infrared components attached to military equipment are frequently used in missiles, rockets, and artillery.
Asia Pacific Leads Precision Guided Munition Market as Need for Improved Defense Capabilities Continues to Soar
Over the forecast period, it is anticipated that the Asia Pacific precision guided munition market will account for the largest revenue share. The biggest players ordering tactical conflict include China, South Korea, India, Pakistan, North Korea, and Japan. Precision-guided munition development is probably facilitated by the rising tensions between the regional nations and the requirement to improve defense capabilities. Indian defense capabilities have been bolstered by the addition of improved missiles like the Prithvi, Agni, Brahmos, and other types due to the rising tension between India and Pakistan. Guided weapons are anticipated to become more prevalent due to technological advancements and joint ventures with foreign defense ministries for modern military hardware.
The North American market is anticipated to experience stable revenue growth throughout the forecast period due to the military of the United States conducting more research and development. The U.S. government manufactures a large number of rockets and long-range missiles. Several major market players with headquarters in North America, including General Dynamics Corporation, Boeing, Lockheed Martin, Northrop Grumman Corporation, and Raytheon Technologies, are present in the region, which has led to steady expansion of the precision guided munition market. Additionally, these important vendors continually invest in R&D projects to create cutting-edge technology incorporated into the missile defense system. Furthermore, it is anticipated that military advancements in the region will improve missiles and artillery, further accelerating market expansion in the region.
Global Precision Guided Munition Market: Competitive Landscape
In April 2021, Northrop Grumman, a US-based aerospace and defense company, partnered with Rheinmetall, a German company that produces equipment and systems for government, security, and military ground, air, and naval forces and specializes in precision-guided munitions. Similarly, in July 2020, UK-based aerospace firm BAE Systems paid Raytheon Technologies Corporation US$1.9 Bn to acquire the Collins Aerospace Military Global Positioning System (GPS) business. With this agreement, BAE will be able to develop GPS anti-jamming and anti-spoofing technology, which is essential for a variety of defense missions.
A few of the players in the precision guided munition market Lockheed Martin, Atlas Elektronik, Thales Group, Raytheon, BAE Systems, Northrop Grumman, General Dynamics, and Elbit Systems.
Global Precision Guided Munition Market is Segmented as Below:
By Mode of Operation
By Launch Platforms
Key Elements Included In The Study: Global Precision Guided Munition Market
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