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The North Atlantic Treaty Organization (NATO), also called the North Atlantic Alliance, is an intergovernmental military alliance between 28 European and 2 North American countries. The organization implements the North Atlantic Treaty that was signed on 4 April 1949. NATO's essential and enduring purpose is to safeguard the freedom and security of all its members by political and military means. Owing to the perceived threat of a military standoff from Russia, the NATO countries are aiming to enhance their defense expenditure to modernize their defense capabilities. Furthermore, the ongoing deployment pattern of NATO forces in different countries across the globe as part of their peacekeeping missions has necessitated the procurement of advanced weaponry and associated ammunition. In 2019, the US accounted for the largest market share due to its gigantic defense spending which is multifold compared to other NATO countries. The US defense expenditure witnessed a 5.3% YoY growth to account for USD 732 billion in 2019. For FY2021, the requested US defense budget of USD 704.6 billion is aimed at improving the military readiness and invest modernization of its armed forces.
COVID-19 Impact analysis
Even while the world is tackling COVID- 19 pandemic, still all the military procurement and maintenance and manufacturing related to the defense sector is continuing in almost every country, because national safety is foremost important and safeguarding soldiers is a prime requirement. Key spenders form NATO countries U.S. delegate a large amount, approximately 4% of their GDP to defense budget. The de-prioritization of defense spending would depend on a variety of other economic and social factors. Major powers like the U.S. have already halted all troop movement, missions, and exercises. Cessing or reducing military exercises would reduce the engagement time, informal testing, and evaluation of equipment and reduce the latent market development potential. Global ammunition manufacturers will still expect some difficulties in their supply chain, as many distributors and suppliers are likely to face their own operational or financial challenges during such a nationwide lockdown.
Top Impacting Factors
The NATO ammunition market trends are as follows:
Rise in Defense Spending
Several NATO countries are now focusing on augmenting their military firepower and defensive capabilities, in the wake of the growing threats from other nations and the increasing deployment of NATO forces to fight insurgent groups in various countries in the world. On the other hand, there is continuous pressure from the US on other NATO countries to increase military spending by at least 2% of their GDP. In this regard, these countries are increasing their military spending, to facilitate the strengthening of their military arsenal. The growth in defense budgets will support the nations to enhance their combat capabilities and help the NATO countries execute their individual and collective defense strategies as planned. According to Stockholm International Peace Research Institute (SIPRI), the total military spending by all NATO member states in 2019 (excluding North Macedonia that joined in 2020) was USD 1035 billion. Out of this, military spending by the United States alone was as much as USD 732 billion in 2019 while the military spending of Germany grew considerably by about 10% in 2019, to USD 49.3 billion. Bulgaria’s military spending increased by 127% while Romania’s military spending increased by 17%. Poland is also increasing its military spending and the country pledged to increase its military spending to 2.5% of its GDP by 2030. Bolstered by the increasing defense spending, the militaries of the NATO countries are continuously changing, aimed at transforming themselves into more capable, modern, and technologically advanced forces, for which they are procuring various weapon systems and associated ammunition aimed at enhancing their defensive prowess.
Key benefits of the report:
Questions answered in the NATO ammunition market research report:
NATO Ammunition Market Report Highlights
Aspects | Details |
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By Caliber Size |
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By Weapon Platform |
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By Product |
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By Region |
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Key Market Players | BAE Systems plc, Olin Corporation, Nexter Group, RUAG Group, Northcorp Grumann Corporation, Diehl Stiftung & Co., Nammo AS., Rheinmetall AG |
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