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Opposing Trends in North America and Asia-Pac will Dictate Defense Spending Outlook

by Asif Anwar | Sep 30, 2014

Strategy Analytics’ projections for global defense spending are derived from analysing and assessing 84 countries, with expected annual defense budgets of more than $500 million, accounting for around 98% of total global defense expenditure. We used historical SIPRI (Stockholm International Peace Research Institute) defence budget data, followed by an assessment of country specific trends on budget growth - over the short, medium and long term - considering GDP growth, threat perception and political intent on force modernisation and indigenisation of the local defense industry.

Strategy Analytics expects global spending on defense to increase at a CAGR of 2.25% over the 2013 to 2023 ten-year period with the Asia-Pacific region showing the fastest growth. Primary shifts in the global defense spending profile will be dictated by opposing trends in the North American and Asia-Pacific regions.

North American spending will be dictated by US budgets and the impact of sequestration. We expect supplementary add-ons to US spending to smooth out the overall impact of sequestration reducing the net cuts through 2019 before flattening out and showing a moderate increase over 2022 to 2023. This will translate to North America spend dropping to just over 31% of global spend in 2023, versus 37% in 2013.

China will both underpin and spur spending in the Asia-Pacific region, leading to Asia-Pacific regional spend approaching 30% in 2023, up from 25% in 2013. The continued growth in the Chinese military budget will lead to other countries such as Japan, South Korea, Taiwan etc., as well as South Asian countries maintaining strong momentum behind their budgets.

Opposing Trends in North America and Asia-Pac will Dictate Defense Spending Outlook,” provides further analysis including details on spending trends across the other regions. Clients of Strategy Analytics Advanced Defense Systems (ADS) service have full access to the report but see the chart below to get an idea of the trends generated from our brand new MyDashboards Tool.  

The Dashboards are a graphical online user interface for quick, customizable charts and data tables from our market research services.

A few highlighted features of the dashboards include:

1)      Bookmarks – clients can save and come back to bookmarks of specific prompt and chart option combinations. 

2)      Visual Filtering – clients can click and drag to highlight a section within a chart or table in order to drill down.

3)      Chart Customization – the charts in the dashboards are extremely customizable using the various dropdown menus.

4)      Exporting – the dashboards support exports to Excel Spreadsheet, PowerPoint Slide, Adobe PDF, and for raw data tables, CSV format.

The dashboards can be found in two locations: 1) the My Dashboards tab of the MySA page (for all subscribed dashboards), and 2) the Dashboards tab of the individual service page (for dashboards of a particular research service). The new dashboard is denoted by a black gauge icon.

We have prepared a demo video, as well as an FAQ page, highlighting the key features of the My Dashboards Tool.

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