Dublin, Aug. 27, 2025 (GLOBE NEWSWIRE) -- The "Defense Budget Analysis Global Market Report 2025" report has been added to ResearchAndMarkets.com's offering.
The defense budget analysis market size has grown strongly in recent years. It will grow from $1.98 trillion in 2024 to $2.08 trillion in 2025 at a compound annual growth rate (CAGR) of 5.2%. The growth in the historic period can be attributed to increasing demand for advanced data management solutions, growing emphasis on unmanned solutions, rising global tensions, rise in instances of armed conflicts, and increasing global security threats.
The defense budget analysis market size is expected to see strong growth in the next few years. It will grow to $2.57 trillion in 2029 at a compound annual growth rate (CAGR) of 5.4%. The growth in the forecast period can be attributed to increasing geopolitical tensions, rising military modernization programs, growing demand for advanced defense technologies, increasing cybersecurity threats, and growing adoption of cloud computing. Major trends in the forecast period include advanced weaponry, adoption of artificial intelligence and cybersecurity in defense, strategic collaborations, advanced weaponry and defense systems, and investing in research and development.
The forecast of 5.4% growth over the next five years indicates a slight reduction of 0.2% from the previous projection for this market. This marginal decrease is influenced by ongoing tariff-related uncertainties between the U.S. and its trade partners. This is likely to directly affect the US through supply chain disruptions for specialized analytics software, sourced from key regions such as Israel and the UK, which could lead to higher expenses for military spending optimization.The effect will also be felt more widely due to reciprocal tariffs and the negative effect on the global economy and trade due to increased trade tensions and restrictions.
The growth of the defense budget analysis market is expected to be driven by rising geopolitical tensions. Geopolitical tensions involve conflicts or increased competition between nations or regions, driven by political, economic, or military factors. These tensions are escalating due to the competition for strategic resources, as countries strive to secure energy, minerals, and technology that are vital for economic and military dominance.
This competition leads to conflicts, trade disputes, and regional instability. Defense budget analysis plays a crucial role in evaluating military capabilities and strategic priorities, which in turn influences power dynamics and fuels further geopolitical tensions. For example, in February 2024, the Global Terrorism Index from the Institute for Economics & Peace reported that terrorism-related deaths rose to 8,352 in 2023, a 22% increase from the previous year. The lethality of attacks also grew, with an average of 2.5 deaths per attack compared to 1.6 in 2022. Consequently, the increase in geopolitical tensions is contributing to the growth of the defense budget analysis market.
Companies operating in the defense budget analysis market are focusing on technological innovations, such as artificial intelligence (AI) accelerators, to improve data-driven decision-making and operational efficiency. AI accelerators are specialized hardware or software designed to enhance the speed and efficiency of AI-driven data processing. For example, in February 2025, Thales SA, a French aerospace and defense company, introduced cortAIx, an AI accelerator aimed at providing secure solutions for advanced data analysis and decision-making for armed forces, aircraft manufacturers, and critical infrastructure operators. This initiative is designed to enhance AI capabilities, supporting the performance of advanced systems and sensors in restricted environments. It also aligns with the UK government's AI opportunities action plan, strengthening AI-driven defense capabilities.
In September 2024, Honeywell International Inc., a US-based technology company, acquired Cobham Advanced Electronic Solutions Systems Holdings LLC for $1.9 billion. This acquisition aims to expand Honeywell's aerospace and defense technology portfolio, particularly in electronic warfare and sensing systems. Cobham Advanced Electronic Solutions specializes in advanced electronics for the aerospace and defense sectors.
Defense budget analysis involves the systematic evaluation of military expenditures to ensure efficient allocation of resources and effective financial planning. It includes examining defense spending trends, cost structures, and funding priorities to support strategic decision-making. This analysis assists governments and organizations in optimizing defense investments while ensuring national security and maintaining operational readiness.
The primary categories in defense budget analysis include military expenses and administrative expenses. Military expenses refer to funds allocated for the development, procurement, and maintenance of military equipment, as well as the training and support of armed forces. This includes expenditures on weapons systems, vehicles, personnel salaries, and operational costs. Technology allocations cover both advanced and conventional systems for electronics and armaments. Sales allocations include foreign military sales and domestic sales, while platform allocations encompass land, airborne, naval, space, and cyber domains.
Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report's Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.
The sharp increase in U.S. tariffs and resulting trade disputes in spring 2025 are significantly affecting the aerospace and defense sector. Prices for key materials such as titanium, carbon fiber composites, and avionics primarily sourced from international suppliers have surged. Defense contractors, constrained by fixed-price government contracts, are forced to absorb these rising costs. Meanwhile, commercial aerospace companies are encountering resistance from airlines over increased aircraft prices. In addition, customs delays are disrupting already tight production timelines for jets and satellites. In response, the industry is stockpiling essential materials, pursuing import waivers for defense-related goods, and working with allied nations to diversify supply chains.
North America was the largest region in the defense budget analysis market in 2024. The regions covered in defense budget analysis report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the defense budget analysis market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
Scope
Markets Covered:
- Allocation Type: Military Expense; Admin Expense
- Technology Allocation: Advanced; Conventional
- System Allocation: Electronics; Armaments
- Sales Allocation: Foreign Military Expense Sales; Indigenous Sales
- Platform Allocation: Land; Airborne; Naval; Space; Cyber
Subsegments:
- Military Expense: Procurement And Acquisition; Research And Development (R&D); Operations And Maintenance; Personnel And Salaries; Infrastructure And Facilities
- Admin Expense: Logistics And Support Services; Training And Education; Healthcare And Welfare Programs; IT And Communication Systems; Miscellaneous Administrative Costs
Defense Budget Analysis Market Competitive Landscape And Company Profiles
- Defense Budget Analysis Market Competitive Landscape
- Defense Budget Analysis Market Company Profiles
- RTX Corporation Overview, Products and Services, Strategy and Financial Analysis
- The Boeing Company Overview, Products and Services, Strategy and Financial Analysis
- Lockheed Martin Corporation Overview, Products and Services, Strategy and Financial Analysis
- International Business Machines Corporation (IBM) Overview, Products and Services, Strategy and Financial Analysis
- Northrop Grumman Corporation Overview, Products and Services, Strategy and Financial Analysis
Defense Budget Analysis Market Other Major And Innovative Companies
- Mitsubishi Heavy Industries Ltd.
- BAE Systems plc
- Safran S.A.
- Thales S.A.
- Boston Consulting Group Inc.
- Science Applications International Corporation (SAIC)
- CACI International Inc.
- Dassault Systemes SE
- Hexagon AB
- Blue Yonder Group Inc.
- Palantir Technologies Inc.
- TT Electronics plc
- Mistral Solutions Pvt. Ltd.
- Lumivero LLC
- Decision Lens Inc.
For more information about this report visit https://www.researchandmarkets.com/r/ssq71c
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