Report Overview

United States Defense Market - Industry Trends & Forecast Report, 2031

United States Defense Market size was estimated to be worth USD 348.44 billion in 2024. During the forecast period between 2025 and 2031, United States Defense Market size is projected to grow at a CAGR of 3.52% reaching a value of USD 443.84 billion by 2031. Major growth factors for United States Defense Market include increasing geopolitical tensions, heightened security concerns, and rising military expenditures. The major focus areas for the U.S. Department of War include next-generation air superiority, strategic deterrence, missile defense (with a proposed USD 25 billion for the "Golden Dome" program), shipbuilding and the maritime industrial base, readiness and soldier quality of life, and cyber warfare.

Source: BlueWeave Consulting

Defense Market – Overview

Defense refers to a state's military actions aimed at safeguarding sovereignty, territorial integrity, and national security by countering aggression, subversive activities, and terrorism. The United States Defense Market is witnessing steady growth due to the rising adoption of integrated defense technologies, which combine multiple systems to enhance security capabilities. Advancements in automation and data analytics are driving modernization efforts, improving operational efficiency. The growing need for a highly adaptable and technologically advanced military is fueling demand for modern defense systems to support evolving security requirements.

United States Defense Market

Growth Drivers

Increasing Budget Allocation to Defense Modernization

Escalating geopolitical tensions worldwide are driving substantial growth in the United States Defense Market, with nations increasing their military expenditures to enhance security and strategic capabilities. A key example is China, which recently announced a 7.2% rise in its defense budget for 2025, continuing its efforts to modernize its armed forces amid intensifying competition with the United States. As the world’s second-largest military spender, China aims to strengthen its defense capabilities despite trailing behind the United States, which maintains the highest military budget. This expansion of defense capabilities reflects broader security concerns and is contributing to a rise in defense investments across the Asia-Pacific region. The United States, meanwhile, continues to lead defense investments. During FY2025, United States defense budget was estimated at USD 849.8 billion, a 4% increase over FY2024. The shift toward higher military budgets is shaping a new defense market cycle, benefiting defense contractors and encouraging advancements in military technology, including unmanned weapon systems, naval fleets, and aerospace defense. As United States power dynamics shift and geopolitical conflicts persist, defense spending is set to remain a key priority for many nations, driving long-term growth in United States Defense Market.

Challenges

Escalating Costs for Development and Maintenance

High costs for development and maintenance are significant restraints on the growth of United States Defense Market. The advanced technology required for modern defense systems, such as next-generation aircraft, naval vessels, and cyber defense solutions, demands substantial investments. Additionally, ongoing maintenance and upgrades of existing military assets further strain budgets. These financial burdens could limit the ability of nations to expand or modernize their forces. As a result, high costs can hinder military readiness and slow the adoption of innovative defense technologies, potentially impacting overall market growth.

Impact of Escalating Geopolitical Tensions on United States Defense Market

Escalating geopolitical tensions could significantly impact United States Defense Market by driving increased defense spending as nations prioritize military preparedness. Heightened conflicts and regional instability push countries to enhance their defense capabilities, leading to larger defense budgets and investments in advanced defense technologies. This surge in demand for military equipment, such as aircraft, weapons systems, and cybersecurity solutions, fuels the growth of United States Defense Market. Additionally, geopolitical uncertainty accelerates arms race dynamics and fosters strategic partnerships, further expanding the defense market. However, it also creates challenges, including rising competition and the need for rapid innovations to address emerging security threats.

 United States Defense Market

Segmental Coverage

United States Defense Market – By Armed Forces

Based on armed forces, United States Defense Market is divided into Airforce, Land, and Naval segments. The air force segment holds the largest share of United States Defense Market by armed forces. The modernization of aircraft capabilities in United States is expected to drive significant growth in the Airforce segment. The naval segment, followed by Air force platform segment, holds a significant market share in United States Defense Market.

Source: BlueWeave Consulting

United States Defense Market – By Product Type

United States Defense Market by product type is divided into Fixed Wing Aircraft (fighter jets, transport aircraft); Rotorcraft (helicopters); Ground Vehicles (tanks, armored fighting vehicles); Naval Vessels (aircraft carriers, submarines, destroyers); Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) Systems; Weapons & Ammunition; Protection & Training Equipment; and Unmanned Aerial Vehicles (UAVs) segments. The naval vessels segment holds the highest share in United States Defense Market by product type. The United States Navy, a pivotal aspect of the nation's defense, safeguards maritime interests with a diverse fleet. Its core mission is protecting maritime borders, detecting threats, and maintaining security in both peace and war. Rising defense spending, exemplified by a notable increase in FY2025, spurs demand. With 175 surface vessels and 68 submarines, the Navy pursues innovations and incorporates unmanned vessels and underwater systems. The active fleet consists of 50 attack submarines (SSN), 14 ballistic-missile submarines (SSBN), and 4 guided-missile submarines (SSGN).

United States Defense Market – By Operation

On the basis of operation, United States Defense Market is bifurcated into Autonomous Defense Equipment and Manual segments. United States, like other major countries across the world, is rapidly adopting unmanned systems, such as unmanned aerial vehicles (UAVs), unmanned combat vehicles, and autonomous drones, for various military applications, such as surveillance, reconnaissance, search and rescue operations, and tactical missions. Unmanned systems are equipped with advanced sensors, 360-degree situational awareness capabilities, and autonomous technologies, enabling them to operate remotely or make autonomous decisions without human intervention. It enhances operational efficiency, reduces risk to personnel, and improves mission outcomes. For instance, United States Army aims to acquire one million drones in the next three to four years. It is a significant increase from the annual purchase of 50,000 drones. Mistral Inc. and UI Inc. have recently won the US Army’s USD 982-million contract for Hero-120 drones. The MQ-9A Reapers have been integrated into the operations of US Marine Corps. The surging demand for unmanned systems is also reflected by advancements in commercial and civilian sectors, where drones are used for purposes ranging from agriculture and delivery to infrastructure inspection. As research and innovations in unmanned systems continue to evolve, these technologies offer an expanding array of applications and further fuel the growth of unmanned systems in United States Defense Market.

Competitive Landscape

United States Defense Market is highly competitive, as a number of companies are competing to gain a significant market share. Key players in the market include Lockheed Martin Corporation, The Boeing Company, BAE Systems plc, RTX Corporation (formerly Raytheon Technologies), Northrop Grumman, General Dynamics, L3Hariss Technologies, Leidos, Huntington Ingalls Industries, and Honeywell International. 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 2025 – United States granted the USD 982-million contract to Mistral Inc. and UI Inc. to acquire Hero-120 drones.

• In April 2025 - The U.S. administration requested USD 27 billion for the "Golden Dome" system, including 14 new warships, to bolster missile defense. Concurrently, the Pentagon was seeking further USD 400 million for Boeing's F-47 sixth-generation stealth fighter development.

Scope of the Report

By Armed Forces

• Airforce

• Land

• Naval

By Product Type

• Fixed Wing Aircraft

  • Fighter Jets

  • Transport Aircraft

• Rotorcraft

  • Helicopters

• Ground Vehicles

  • Tanks

  • Armored Fighting Vehicles

• Naval Vessels

  • Aircraft Carriers

  • Submarines

  • Destroyers

• Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) Systems

• Weapons & Ammunition

• Protection & Training Equipment

• Unmanned Aerial Vehicles (UAVs)

By Operation

• Autonomous Defense Equipment

• Manual

1. Research Framework
   1. Research Objective
   2. Product Overview
   3. Market Segmentation
2. Executive Summary
3. United States Defense Market Insights
   1. End User Value Chain Analysis
   2. DROC Analysis
      1. Growth Drivers
         1. Rising Geopolitical Tensions
         2. Increasing Defense Budgets
         3. Growing Threat of Cyber Warfare
      2. Restraints
         1. High Development & Maintenance Costs
         2. Regulatory Challenges & Export Retractions
      3. Opportunities
         1. Growing Demand for Unmanned Systems
         2. Rising in Space-based Defense Initiative
      4. Challenges
         1. Supply Chain Disruptions
         2. Geopolitical Sanctions & Trade Barriers
   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. United States Defense Market: Marketing Strategies
5. United States Defense Market: Pricing Analysis
6. United States Defense Market Overview
   1. Market Size & Forecast, 2019–2031
      1. By Value (USD Billion)
   2. Market Share & Forecast
      1. By Armed Forces
         1. Airforce
         2. Land
         3. Naval
      2. By Product Type
         1. Fixed Wing Aircraft
         2. Rotorcraft
         3. Ground Vehicles
         4. Naval Vessels
         5. Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) Systems
         6.  Weapons & Ammunition
         7.  Protection & Training Equipment
         8.  Unmanned Aerial Vehicles (UAVs)
      3. By Operation
         1. Autonomous Defense Equipment
         2. Manual
7. Competitive Landscape
   1. List of Key Players and Their Offerings
   2. United States Defense Company Market Share Analysis, 2024
   3. Competitive Benchmarking, By Operating Parameters
   4. Key Strategic Developments (Mergers, Acquisitions, Partnerships)
8. Impact of Escalating Geopolitical Tensions on United States Defense Market
9. Company Profiles (Company Overview, Financial Matrix, Competitive Landscape, Key Personnel, Key Competitors, Contact Address, Strategic Outlook, SWOT Analysis)

10. Key Strategic Recommendations
11. 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 Region
    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        United States Defense Segmentation

Figure 2        United States Defense Market Value Chain Analysis

Figure 3        Company Market Share Analysis, 2024

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

Figure 5        United States Defense Market Share, By Armed Forces, By Value (USD Billion), 2019–2031

Figure 6        United States Defense Market Share, By Product Type, By Value (USD Billion), 2019–2031

Figure 7        United States Defense Market Share, By Operation, By Value (USD Billion), 2019–2031

List of Tables

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

Table 2         United States Defense Market Size, By Armed Forces, By Value (USD Billion), 2019–2031

Table 3         United States Defense Market Size, By Product Type, By Value (USD Billion), 2019–2031

Table 4         United States Defense Market Size, By Operation, By Value (USD Billion), 2019–2031

Table 5         Lockheed Martin Corporation Company Overview

Table 6         Lockheed Martin Corporation Financial Overview

Table 7         The Boeing Company: Company Overview

Table 8         The Boeing Company Financial Overview

Table 9         BAE Systems plc Company Overview

Table 10       BAE Systems plc Financial Overview

Table 11       RTX Corporation (formerly Raytheon Technologies) Company Overview

Table 12       RTX Corporation (formerly Raytheon Technologies) Financial Overview

Table 13       Northrop Grumman Company Overview

Table 14       Northrop Grumman Financial Overview

Table 15       General Dynamics Company Overview

Table 16       General Dynamics Financial Overview

Table 17       L3Harris Technologies Company Overview

Table 18       L3Harris Technologies Financial Overview

Table 19       Leidos Company Overview

Table 20       Leidos Financial Overview

Table 21       Huntington Ingalls Industries Overview

Table 22       Huntington Ingalls Industries Financial Overview

Table 23       Honeywell International Company Overview

Table 24       Honeywell International Financial Overview