United States Defense Market - Size and trends, budget allocation, regulations, key acquisitions, competitive landscape and forecast, 2025-2030

United States Defense Market - Size and trends, budget allocation, regulations, key acquisitions, competitive landscape and forecast, 2025-2030

Summary

United States Defense Market - Size and trends, budget allocation, regulations, key acquisitions, competitive landscape and forecast, 2025-2030 report provides the market size forecast and the projected growth rate for the next five years. The report covers industry analysis including the key market drivers, emerging technology trends, and major challenges faced by market participants. It also offers insights regarding key factors and government programs that are expected to influence the demand for military platforms over the forecast period.

In 2025, the U.S. defense budget underwent a reduction, exhibiting a negative annual growth rate of 4.8%. The allocated budget for 2025 is $921 billion, a decrease from the previous year's $968 billion. The current budget reflects a rise from 2021, following the financial challenges wrought by the COVID-19 pandemic, which significantly constrained the budget's scope. Subsequently, the budget swelled to a record high, driven by substantial supplemental expenditures in response to a deteriorating global security landscape. This expansion was prompted by the Russian invasion of Ukraine, conflicts in the Middle East, and persistent tensions with China over territorial disputes in the Indo-Pacific region. These conflicts have refocused attention for the US government on supporting the rules-based international order it upholds and providing material and training assistance to major NATO and non-NATO allies. The National Defense Authorization ACT (NDAA) for 2025 stipulates an expected defense budget jump of 3.2% to $950.8 billion in 2026, though President Trump’s return to the White House with narrow Republican majorities in Congress raises questions about the future of the budget.

The Acquisition + RDT&E budget of the US remains high at 33.5% of the total budget ($921.0 billion) in 2025. The US military remains the world’s largest spender to maintain its uniquely globe-spanning presence, with major power projection and expeditionary capabilities; when it is not fighting, it is cooperating with and assisting friendly nations, training alongside them and engaging in technology sharing. These commitments keeps the US the world’s largest defense spender for the foreseeable future.

With President Trump’s return to the Oval Office, there is more uncertainty than usual about the future of American defense spending. In December 2024, President Biden passed the National Defense Authorization Act for Fiscal Year 2025 (NDAA FY2025), which authorizes $921.0 billion in funding for the Department of Defense (DoD) and Department of Energy (DoE). While the bill forecasts relatively modest levels of spending (2026-30), it is unclear if President Trump and a narrow Republican majority in Congress will agree to increase or decrease this level of spending. Ultimately, the legislative branch maintains ‘the power of the purse’ and sends fiscal requests to the president for approval. While the Trump administration has ordered the Pentagon to plan for spending cuts equal to 8% per year (roughly $50 billion) for the next 5 years, leading Republicans in Congress have publicly remarked that they hope to increase defense spending to tackle the challenges posed by China, Russia, Iran, and North Korea. Congressional aspirations for increased defense spending could see a surge in funding to roughly $1.5 trillion, or 5% of GDP, by 2030.

Despite the comments of leaders in both the executive and legislative branches, the most likely outcome for American defense spending-considering the, extremely slim and slow-moving Republican majorities in Congress in power-will be a continuation of the nominal increases in funding. The prioritization of tax cuts and a refusal to meaningfully cut entitlements will lead Congress to maintain the defense spending status quo, raising total defense spending by 2030 to $1,018 billion ($1 trillion) with an estimated CAGR of 1.7% between 2026-30.

Key Highlights

• Modernization of equipment and the rise of authoritarian powers are key factors driving defense expenditure
• Major ongoing procurement program include procurement of F-35, Virginia-class submarines, and Columbia-class submarines

Scope

This report offers a detailed analysis of United States's defense market, with market size forecasts covering the next five years. It also offers insights into the strategy, security environment and defense market dynamics of the country. Various sections covered in the report are as follows -

• Defense Budget Assessment: This chapter covers the defense budgeting process, market size forecasts, drivers of expenditure, and allocation analysis. It also examines key market trends and insights.
• Military Doctrine and Security Environment: Detailed analysis of military doctrine, strategic alliances, geopolitical dynamics, and the political, social, and economic factors influencing the security environment.
• Market Entry Strategy and Regulations: This section elaborates on essential aspects of procurement policy and market regulations, market entry routes, key defense procurement bodies and major deals.
• Market attractiveness and emerging opportunities: It evaluates the attractiveness of various defense sectors, indicating cumulative market value, and highlights the top sectors and defense segments by value in the country.
• Defense Platforms Import and Export Dynamics: Provides an understanding of the defense platform imports and exports of the country from 2016 to 2023. Both imports and exports of the country are provided in terms of value ($M) and volume (units), categorized by country and sector.
• Defense Platform Acquisitions: It offers an overview of defense platform acquisitions by value. It lists current defense procurement schedules for the major ongoing and planned military platforms that have been formulated in the country and elaborates on the reasons leading to the procurement of the same.
• Fleet Size: Outlines the current fleet sizes of the Army, Air Force, and Navy, detailing the year of acquisition, units in service, and the prime contractor for the equipment.
• Competitive Landscape: Profiles the main defense companies operating in the country, offering insights into their business overviews, latest contracts, and financial results.

Reasons to Buy

• Determine prospective investment areas based on a detailed trend analysis of the United States defense market over the next five years
• Gain in-depth understanding about the underlying factors driving demand for different defense and internal security segments in the United States market and identify the opportunities offered.
• Strengthen your understanding of the market in terms of demand drivers, market trends, and the latest technological developments, among others
• Identify the major threats that are driving the United States defense market providing a clear picture about future opportunities that can be tapped, resulting in revenue expansion
• Channel resources by focusing on the ongoing programs that are being undertaken by the United States government
• Make correct business decisions based on in-depth analysis of the competitive landscape consisting of detailed profiles of the top defense equipment providers in the country. The company profiles also includes information about the key products, alliances, recent contract awarded, and financial analysis, wherever available