Military Ammunition Market To Witness Massive Growth by 2025
Technology is shaping how battles are fought, borders are shielded, and criminals are caught. Increasing adoption of progressive military concepts, technology, and methods in the traditional domains of sea, land, and air emphasize how combatants must modernize to reserve their battlefield worthiness. Contemporary warfare integrates armed forces with advanced munitions to enhance their lethality and survivability on the battlefield.
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Governments across the world are splurging a significant volume of their gross domestic product (GDP) in modernizing their armed forces. Modernizing militaries has been the prime objective for nations as it directly impacts national security. As tensions are rising between nations, governments are procuring modern military products to enhance their defensive and offensive capabilities. Ammunition is one of the most traded products as it acts as a fuel to all military entities.
Munition readiness is one of the top priorities in ensuring the military is prepared for the next conflict. Hence, military forces are increasing their investments in all types of ammunition to enhance their combat capabilities. In March 2019, the U.S. procured 5,112 hellfire missiles, which is higher than the 2018 procurement of 2,309 hellfire missiles. Moreover, the U.S. military has also spent $508 million on small and medium caliber ammunition in 2019 versus the $382 million expenditure in 2018.
The global slowdown that began due to the outbreak of the novel COVID-19 had a deep impact on all industries. The governments are forced to freeze all operations that involve transport and mass gathering to counter the COVID-19 pandemic. The restriction impacted the flow of the supply chain in all industries, and the defense industry is no exception.
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But the impact of COVID-19 on the defense industry is significantly low due to the heavy funding by the governments as it directly concerns national security. It is to be assumed that since governments are focusing more on boosting the healthcare industry for future pandemic readiness, every other industry has to experience slight cutbacks in orders to compensate for extra investments in the healthcare industry. However, this is not the case for every country.
Hence, it can be observed that COVID-19 might impact defense spending in a few countries. The military ammunition market is less affected when compared to other markets, as the funding has already been allocated to all major contracts for munition modernization and procurements. However, there might be a delay in the delivery of these contracts due to the various restrictions imposed by the governments. The global military ammunition market reported a revenue of $57.89 billion in 2019 and is estimated to cross $74.83 billion by 2025, growing at a CAGR of 5.40% during the forecast period, 2020-2025. During the forecast period, 2020 and 2021 are slightly affected by COVID-19, leading to the hindrance of the market.