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Europe Defense Market
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Europe Defense Market

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Europe Defense Market, By Platform (Terrestrial, Aerial, Naval); By Equipment (Armament, Military Vehicles, Military Aircraft, Naval Vessels, Communication, Personnel Training & Protection, Unmanned Systems); By End User (Army, Navy, Air Force, Joint Forces, Paramilitary & Homeland Security); By Country (Germany, United Kingdom, Italy, France, Spain, Belgium, Russia, The Netherlands, Rest of Europe), Trend Analysis, Competitive Landscape & Forecast, 2019–2031

  • Published Date: April 2025
  • Report ID: BWC25212
  • Available Format: PDF
  • Page: 280

Report Overview

An increasing defense budget, focus on military modernization, and collaborative defense initiatives are expected to boost the growth of Europe Defense Market during the forecast period between 2025 and 2031.

Europe Defense Market - Industry Trends & Forecast Report, 2031

Europe Defense Market size was estimated to be worth USD 490.8 billion in 2024. During the forecast period between 2025 and 2031, Europe Defense Market size is projected to grow at a robust CAGR of 10.2% reaching a value of USD 968.7 billion by 2031. Major growth factors for Europe Defense Market include rising defense budgets and the increasing demand for advanced weaponry and ammunition to enhance regional military capabilities. Heightened geopolitical tensions, particularly the ongoing Russia-Ukraine conflict, have prompted European countries to ramp up defense spending and invest heavily in research and development to counter modern warfare technologies. Additionally, NATO member states are channeling significant financial support toward Ukraine, further fueling market expansion. Despite these positive trends, stringent regulatory frameworks in some European nations are hindering the procurement and production of advanced defense systems, which may act as a restraint on market growth. Nevertheless, advancements in defense technology, particularly the integration of artificial intelligence, are anticipated to create promising opportunities for market players during the forecast period.

Europe Defense Market

Defense – Overview

Defense refers to the measures and strategies implemented by a nation to protect its sovereignty, territorial integrity, and interests against external threats or aggression. It encompasses a wide range of activities, including military operations, intelligence gathering, surveillance, and the development and deployment of defense systems. Defense involves land, air, naval, and cyber capabilities, supported by advanced technologies and well-trained personnel. It also includes collaborations with allied nations and participation in defense alliances to enhance security. Ultimately, defense aims to maintain national stability, deter potential adversaries, and ensure the safety and protection of citizens and critical infrastructure from any form of attack.

Europe Defense Market

Growth Drivers

Increasing Focus on Military Modernization

Amidst a complex geopolitical landscape shaped by the war in Ukraine and a deteriorating security situation across Europe, the primary catalyst for growth within Europe Defense Market is the intensified focus on military modernization, an imperative driven by evolving threats and the necessity for enhanced operational readiness, which is reshaping procurement strategies and injecting dynamism into the European defense technological and industrial base (EDTIB) as underscored by the European defense industrial strategy (EDIS) aiming for EU readiness; this modernization drive fuels demand for advanced technologies, necessitates the replacement of legacy systems, directly contributes to increased operational readiness, and is inherently linked to the technological complexity and associated costs of modern defense systems, thereby acting as the most potent stimulus to Europe Defense Market even as aspirations for increased defense budgets and collaborative initiatives play supporting roles within a context where current fragmentation still presents challenges to fully capitalizing on this growth driver compared to more consolidated global players.

Challenges

High Development Costs

High development costs could significantly restrain the growth of Europe Defense Market. Developing advanced defense technologies, such as next-generation aircraft, missile systems, and cybersecurity tools, requires substantial financial investments in research, skilled labor, and infrastructure. These high costs can delay project timelines and limit the ability of smaller nations or companies to participate in the market. Budget constraints and the need to balance defense spending with other national priorities further challenge procurement and innovation efforts. As a result, despite growing security concerns, financial limitations often slow down the adoption and deployment of cutting-edge defense solutions across the European region.

Impact of Escalating Geopolitical Tensions on Europe Defense Market

Escalating geopolitical tensions could significantly impact Europe Defense Market by driving increased defense spending and accelerating modernization efforts across the region. Ongoing conflicts, such as the Russia-Ukraine war, have heightened security concerns, prompting European nations to strengthen their military capabilities through advanced technologies and strategic alliances. Countries are investing more in defense equipment, cybersecurity, and research and development to address emerging threats. Additionally, NATO member states are enhancing collaborative defense strategies and allocating funds to support vulnerable allies. However, prolonged tensions may also strain budgets and supply chains, posing challenges for sustainable growth in the defense industry over the long term.

Europe Defense Market

Segmental Coverage

Europe Defense Market – By Platform

Based on platform, Europe Defense Market is divided into Terrestrial, Aerial, and Naval segments. The naval segment holds the highest share in Europe Defense Market by platform. Europe’s naval defense sector is recognized as a vital strategic asset, backed by advanced shipbuilding capabilities and globally competitive naval yards. European manufacturers of military vessels and submarines are experiencing strong growth, especially through rising exports to international markets. Despite increasing competition from Chinese, Russian, and South Korean shipyards, Europe maintains its edge through technological superiority and consistent export performance. Although naval forces in Europe saw significant reductions over the past decades, renewed focus on maritime security, driven by geopolitical tensions and great power competition, is revitalizing the sector. Governments across Europe are actively investing in the modernization of their naval fleets and forging new defense contracts. For instance, the EU is supporting joint naval R&D initiatives with substantial funding, while countries like Greece have announced major procurement plans, including multi-billion-dollar deals for advanced warships. This growing emphasis on modernizing naval capabilities is expected to fuel the sustained dominance of the naval platform segment in the European Defense Market over the coming years.

Europe Defense Market Size

Europe Defense Market – By Equipment

On the basis of equipment, Europe Defense Market is divided into Armament, Military Vehicles, Military Aircraft, Naval Vessels, Communication, Personnel Training & Protection, and Unmanned Systems segments.

Europe Defense Market – By End User

Europe Defense Market by end user is divided into Army, Navy, Air Force, Joint Forces, and Paramilitary & Homeland Security segments.

Europe Defense Market – By Country

The in-depth research report on Europe Defense Market covers a number of country-specific markets across the region: Germany, United Kingdom, Italy, France, Spain, Belgium, Russia, The Netherlands, and Rest of Europe. Russia holds the highest share in Europe Defense Market and is expected to maintain dominance during the forecast period. The country's sustained military spending and focus on developing advanced defense technologies continue to drive market growth. Russia is the fifth largest global defense spender. As a result, the defense sector in Russia plays a pivotal role in its economy. The sector generates significant employment and contributes heavily to international arms trade. According to SIPRI, Russia ranked as the second-largest exporter of conventional arms in 2021, with exports valued at USD 14.6 billion. In 2022, Russia increased its defense budget to USD 69 billion—54% higher than its initial allocation—reflecting its strategic priorities amid the ongoing conflict with Ukraine. The war has accelerated the usage of various sophisticated missile systems, leading to the depletion of inventories and a renewed focus on replenishing and upgrading their military arsenal. This increased investment in restocking and modernization is expected to further strengthen Russia’s position in the European Defense Market throughout the forecast period.

Europe Defense Market Share

Competitive Landscape

Europe Defense Market is highly competitive, as a number of companies are competing to gain a significant market share. Key players in the market include RTX Corporation, Leonardo S.p.A. (Italy), Lockheed Martin Corporation, Safran SA (France), Airbus SE (France), Northrop Grumman Corporation, BAE Systems (United Kingdom), Saab AB (Sweden), Rheinmetall AG (Germany), General Dynamics Corporation, and Thales Group (France). To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

  • In March 2025 - The European Union unveiled its EUR 860 billion “ReArm Europe Plan” to strengthen regional defense capabilities amid reduced support from United States.

  • In February 2025 - The European Commission committed over EUR 1 billion through the European Defence Fund (EDF) to boost next-generation military innovations. The initiative supports R&D in ground and naval combat, cybersecurity, energy resilience, and human-AI interaction.

Scope of the Report

Attributes

Details

Years Considered

Historical Data – 2019–2024

Base Year – 2024

Estimated Year – 2025

Forecast Period – 2025–2031

Facts Covered

Revenue in USD Million

Market Coverage

Germany, United Kingdom, Italy, France, Spain, Belgium, Russia, The Netherlands, Rest of Europe

Product/ Service Segmentation

Platform, Equipment, End User, Country

Key Players

RTX Corporation, Leonardo S.p.A. (Italy), Lockheed Martin Corporation, Safran SA (France), Airbus SE (France), Northrop Grumman Corporation, BAE Systems (United Kingdom), Saab AB (Sweden), Rheinmetall AG (Germany), General Dynamics Corporation, Thales Group (France)

 

By Platform

  • Terrestrial

  • Aerial

  • Naval

By Equipment

  • Armament

  • Military Vehicles

  • Military Aircraft

  • Naval Vessels

  • Communication

  • Personnel Training & Protection

  • Unmanned Systems

By End User

  • Army

  • Navy

  • Air Force

  • Joint Forces

  • Paramilitary & Homeland Security

By Country

  • Germany

  • United Kingdom

  • Italy

  • France

  • Spain

  • Belgium

  • Russia

  • The Netherlands

  • Rest of Europe

  1. Research Framework
    1. Research Objective
    2. Product Overview
    3. Market Segmentation
  2. Executive Summary
  3. Europe Defense Market Insights
    1. Industry Value Chain Analysis
    2. DROC Analysis
      1. Growth Drivers
        1. Increasing Defense Budget
        2. Focus on Military Modernization
        3. Collaborative Defense Initiatives
      2. Restraints
        1. Supply Chain Constraints
        2. High Development Costs
      3. Opportunities
        1. Technological Innovation
        2. Joint Procurement Program
      4. Challenges
        1. Geopolitical Uncertainty
        2. Economic Constraints
    3. Technological Advancements/Recent Developments
    4. Regulatory Framework
    5. Porter’s Five Forces Analysis
      1. Bargaining Power of Suppliers
      2. Bargaining Power of Buyers
      3. Threat of New Entrants
      4. Threat of Substitutes
      5. Intensity of Rivalry
  4. Europe Defense Market, Pricing Analysis
  5. Europe Defense Market: Marketing Strategies
  6. Europe Defense Market Overview
    1. Market Size & Forecast, 2019–2031
      1. By Value (USD Billion)
    2. Market Share & Forecast
      1. By Platform
        1. Terrestrial
        2. Aerial
        3. Naval
      2. By Equipment
        1. Armament
        2. Military Vehicles
        3. Military Aircraft
        4. Naval Vessels
        5. Communication
        6. Personnel Training & Protection
        7. Unmanned Systems
      3. By End User
        1. Army
        2. Navy
        3. Air Force
        4. Joint Forces
        5. Paramilitary & Homeland Security
      4. By Country
        1. Germany
        2. United Kingdom
        3. Italy
        4. France
        5. Spain
        6. Belgium
        7. Russia
        8. The Netherlands
        9. Rest of Europe
  7. Germany Defense Market
    1. Market Size & Forecast, 2019–2031
      1. By Value (USD Billion)
    2. Market Share & Forecast
      1. By Platform
      2. By Equipment
      3. By End User
  8. United Kingdom Defense Market
    1. Market Size & Forecast, 2019–2031
      1. By Value (USD Billion)
    2. Market Share & Forecast
      1. By Platform
      2. By Equipment
      3. By End User
  9. Italy Defense Market
    1. Market Size & Forecast, 2019–2031
      1. By Value (USD Billion)
    2. Market Share & Forecast
      1. By Platform
      2. By Equipment
      3. By End User
  10. France Defense Market
    1. Market Size & Forecast, 2019–2031
      1. By Value (USD Billion)
    2. Market Share & Forecast
      1. By Platform
      2. By Equipment
      3. By End User
  11. Spain Defense Market
    1. Market Size & Forecast, 2019–2031
      1. By Value (USD Billion)
    2. Market Share & Forecast
      1. By Platform
      2. By Equipment
      3. By End User
  12. Belgium Defense Market
    1. Market Size & Forecast, 2019–2031
      1. By Value (USD Billion)
    2. Market Share & Forecast
      1. By Platform
      2. By Equipment
      3. By End User
  13. Russia Defense Market
    1. Market Size & Forecast, 2019–2031
      1. By Value (USD Billion)
    2. Market Share & Forecast
      1. By Platform
      2. By Equipment
      3. By End User
  14. The Netherlands Defense Market
    1. Market Size & Forecast, 2019–2031
      1. By Value (USD Billion)
    2. Market Share & Forecast
      1. By Platform
      2. By Equipment
      3. By End User
  15. Rest of Europe Defense Market
    1. Market Size & Forecast, 2019–2031
      1. By Value (USD Billion)
    2. Market Share & Forecast
      1. By Platform
      2. By Equipment
      3. By End User
  16. Competitive Landscape
    1. List of Key Players and Their Offerings
    2. Europe Defense Company Market Share Analysis, 2024
    3. Competitive Benchmarking, By Operating Parameters
    4. Key Strategic Developments (Mergers, Acquisitions, Partnerships)
  17. Impact of Escalating Geopolitical Tensions on Europe Defense Market
  18. Company Profiles (Company Overview, Financial Matrix, Competitive Landscape, Key Personnel, Key Competitors, Contact Address, Strategic Outlook, SWOT Analysis)
    1. RTX Corporation
    2. Leonardo S.p.A. (Italy)
    3. Lockheed Martin Corporation
    4. Safran SA (France)
    5. Airbus SE (France)
    6. Northrop Grumman Corporation
    7. BAE Systems (United Kingdom)
    8. Saab AB (Sweden)
    9. Rheinmetall AG (Germany)
    10. General Dynamics Corporation
    11. Thales Group (France)
    12. Other Prominent Players
  19. Key Strategic Recommendations
  20. Research Methodology
    1.  Qualitative Research
      1.  Primary & Secondary Research
    2.  Quantitative Research
    3.  Market Breakdown & Data Triangulation
      1.  Secondary Research
      2.  Primary Research
    4.  Breakdown of Primary Research Respondents, By Country
    5.  Assumptions & Limitations

*Financial information of non-listed companies can be provided as per availability.

**The segmentation and the companies are subject to modifications based on in-depth secondary research for the final deliverable

          

 

List of Figures

 

Figure 1       Europe Defense Segmentation

Figure 2       Europe Defense Market Value Chain Analysis

Figure 3       Company Market Share Analysis, 2023

Figure 4       Europe Defense Market Size, By Value (USD Billion), 2019–2031

Figure 5       Europe Defense Market Share, By Platform, By Value, 2019–2031

Figure 6       Europe Defense Market Share, By Equipment, By Value, 2019–2031

Figure 7       Europe Defense Market Share, By End User, By Value, 2019–2031

Figure 8       Europe Defense Market Share, By Country, By Value, 2019–2031

Figure 9       Germany Defense Market Size, By Value (USD Billion), 2019–2031

Figure 10     Germany Defense Market Share, By Platform, By Value, 2019–2031

Figure 11     Germany Defense Market Share, By Equipment, By Value, 2019–2031

Figure 12     Germany Defense Market Share, By End User, By Value, 2019–2031

Figure 13     United Kingdom Defense Market Size, By Value (USD Billion), 2019–2031

Figure 14     United Kingdom Defense Market Share, By Platform, By Value, 2019–2031

Figure 15     United Kingdom Defense Market Share, By Equipment, By Value, 2019–2031

Figure 16     United Kingdom Defense Market Share, By End User, By Value, 2019–2031

Figure 17     Italy Defense Market Size, By Value (USD Billion), 2019–2031

Figure 18     Italy Defense Market Share, By Platform, By Value, 2019–2031

Figure 19     Italy Defense Market Share, By Equipment, By Value, 2019–2031

Figure 20     Italy Defense Market Share, By End User, By Value, 2019–2031

Figure 21     France Defense Market Size, By Value (USD Billion), 2019–2031

Figure 22     France Defense Market Share, By Platform, By Value, 2019–2031

Figure 23     France Defense Market Share, By Equipment, By Value, 2019–2031

Figure 24     France Defense Market Share, By End User, By Value, 2019–2031

Figure 25     Spain Defense Market Size, By Value (USD Billion), 2019–2031

Figure 26     Spain Defense Market Share, By Platform, By Value, 2019–2031

Figure 27     Spain Defense Market Share, By Equipment, By Value, 2019–2031

Figure 28     Spain Defense Market Share, By End User, By Value, 2019–2031

Figure 29     Belgium Defense Market Size, By Value (USD Billion), 2019–2031

Figure 30     Belgium Defense Market Share, By Platform, By Value, 2019–2031

Figure 31     Belgium Defense Market Share, By Equipment, By Value, 2019–2031

Figure 32     Belgium Defense Market Share, By End User, By Value, 2019–2031

Figure 33     Russia Defense Market Size, By Value (USD Billion), 2019–2031

Figure 34     Russia Defense Market Share, By Platform, By Value, 2019–2031

Figure 35     Russia Defense Market Share, By Equipment, By Value, 2019–2031

Figure 36     Russia Defense Market Share, By End User, By Value, 2019–2031

Figure 37     The Netherlands Defense Market Size, By Value (USD Billion), 2019–2031

Figure 38     The Netherlands Defense Market Share, By Platform, By Value, 2019–2031

Figure 39     The Netherlands Defense Market Share, By Equipment, By Value, 2019–2031

Figure 40     The Netherlands Defense Market Share, By End User, By Value, 2019–2031

Figure 41     Rest of Europe Defense Market Size, By Value (USD Billion), 2019–2031

Figure 42     Rest of Europe Defense Market Share, By Platform, By Value, 2019–2031

Figure 43     Rest of Europe Defense Market Share, By Equipment, By Value, 2019–2031

Figure 44     Rest of Europe Defense Market Share, By End User, By Value, 2019–2031

 

List of Tables

 

Table 1        Europe Defense Market Size, By Value (USD Billion), 2019–2031

Table 2        Europe Defense Market Size, By Platform, By Value, 2019–2031

Table 3        Europe Defense Market Size, By Equipment, By Value, 2019–2031

Table 4        Europe Defense Market Size, By End User, By Value, 2019–2031

Table 5        Europe Defense Market Size, By Country, By Value, 2019–2031

Table 6        Germany Defense Market Size, By Value (USD Billion), 2019–2031

Table 7        Germany Defense Market Size, By Platform, By Value, 2019–2031

Table 8        Germany Defense Market Size, By Equipment, By Value, 2019–2031

Table 9        Germany Defense Market Size, By End User, By Value, 2019–2031

Table 10      United Kingdom Defense Market Size, By Value (USD Billion), 2019–2031

Table 11      United Kingdom Defense Market Size, By Platform, By Value, 2019–2031

Table 12      United Kingdom Defense Market Size, By Equipment, By Value, 2019–2031

Table 13      United Kingdom Defense Market Size, By End User, By Value, 2019–2031

Table 14      Italy Defense Market Size, By Value (USD Billion), 2019–2031

Table 15      Italy Defense Market Size, By Platform, By Value, 2019–2031

Table 16      Italy Defense Market Size, By Equipment, By Value, 2019–2031

Table 17      Italy Defense Market Size, By End User, By Value, 2019–2031

Table 18      France Defense Market Size, By Value (USD Billion), 2019–2031

Table 19      France Defense Market Size, By Platform, By Value, 2019–2031

Table 20      France Defense Market Size, By Equipment, By Value, 2019–2031

Table 21      France Defense Market Size, By End User, By Value, 2019–2031

Table 22      Spain Defense Market Size, By Value (USD Billion), 2019–2031

Table 23      Spain Defense Market Size, By Platform, By Value, 2019–2031

Table 24      Spain Defense Market Size, By Equipment, By Value, 2019–2031

Table 25      Spain Defense Market Size, By End User, By Value, 2019–2031

Table 26      Belgium Defense Market Size, By Value (USD Billion), 2019–2031

Table 27      Belgium Defense Market Size, By Platform, By Value, 2019–2031

Table 28      Belgium Defense Market Size, By Equipment, By Value, 2019–2031

Table 29      Belgium Defense Market Size, By End User, By Value, 2019–2031

Table 30      Russia Defense Market Size, By Value (USD Billion), 2019–2031

Table 31      Russia Defense Market Size, By Platform, By Value, 2019–2031

Table 32      Russia Defense Market Size, By Equipment, By Value, 2019–2031

Table 33      Russia Defense Market Size, By End User, By Value, 2019–2031

Table 34      The Netherlands Defense Market Size, By Value (USD Billion), 2019–2031

Table 35      The Netherlands Defense Market Size, By Platform, By Value, 2019–2031

Table 36      The Netherlands Defense Market Size, By Equipment, By Value, 2019–2031

Table 37      The Netherlands Defense Market Size, By End User, By Value, 2019–2031

Table 38      Rest of Europe Defense Market Size, By Value (USD Billion), 2019–2031

Table 39      Rest of Europe Defense Market Size, By Platform, By Value, 2019–2031

Table 40      Rest of Europe Defense Market Size, By Equipment, By Value, 2019–2031

Table 41      Rest of Europe Defense Market Size, By End User, By Value, 2019–2031

Table 42      RTX Corporation Company Overview

Table 43      RTX Corporation Financial Overview

Table 44      Leonardo S.p.A. (Italy) Company Overview

Table 45      Leonardo S.p.A. (Italy) Financial Overview

Table 46      Lockheed Martin Corporation Company Overview

Table 47      Lockheed Martin Corporation Financial Overview

Table 48      Safran SA (France) Company Overview

Table 49      Safran SA (France) Financial Overview

Table 50      Airbus SE (France) Company Overview

Table 51      Airbus SE (France) Financial Overview

Table 52      Northrop Grumman Corporation Company Overview

Table 53      Northrop Grumman Corporation Financial Overview

Table 54      BAE Systems (United Kingdom) Company Overview

Table 55      BAE Systems (United Kingdom) Financial Overview

Table 56      Saab AB (Sweden) Company Overview

Table 57      Saab AB (Sweden) Financial Overview

Table 58      Rheinmetall AG (Germany) Company Overview

Table 59      Rheinmetall AG (Germany) Financial Overview

Table 60      General Dynamics Corporation Company Overview

Table 61      General Dynamics Corporation Financial Overview

Table 62      Thales Group (France) Company Overview

Table 63      Thales Group (France) Financial Overview

Market Segmentation

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Frequently Asked Questions (FAQs):

Ans: Europe Defense Market size was estimated at USD 490.8 billion in 2024.
Ans: During the forecast period between 2025 and 2031, Europe Defense Market size is expected to grow at a CAGR of 10.2% reaching a value of USD 968.7 billion by 2031.
Ans: Major factors driving the growth of Europe Defense Market include an increasing defense budget, focus on military modernization, and collaborative defense initiatives.
Ans: Key players in Europe Defense Market include RTX Corporation, Leonardo S.p.A. (Italy), Lockheed Martin Corporation, Safran SA (France), Airbus SE (France), Northrop Grumman Corporation, BAE Systems (United Kingdom), Saab AB (Sweden), Rheinmetall AG (Germany), General Dynamics Corporation, and Thales Group (France).
Ans: The naval segment holds the largest market share of Europe Defense Market by platform.
Ans: Russia is expected to grow at the fastest CAGR in Europe Defense Market during the forecast period between 2025 and 2031.