Ammunition Market Overview and Growth Forecast
The Ammunition Market was valued at USD 25,126.4 million in 2022 and is projected to grow from USD 26,228.2 million in 2023 to USD 38,322.3 million by 2032, reflecting a compound annual growth rate (CAGR) of 4.3% during the forecast period (2023 - 2032). This growth is driven by the increasing number of armed conflicts and border disputes globally. Additionally, the modernization of military and law enforcement agencies is expected to further boost the market throughout the forecast period.
Rising Armed Conflicts and Border Disputes
The prevalence of political unrest, geopolitical tensions, and internal and border conflicts is anticipated to drive revenue growth in the Ammunition Market. Expanding military forces, increasing the number of military personnel, and escalating conflicts in regions such as the Middle East and Asia are boosting the demand for large-caliber ammunition in countries like South Korea, Russia, and Japan. Technological advancements and increased expenditure on research and development are accelerating market growth.
Example: Increased Military Expenditures
For instance, during the Russia-Ukraine conflict, Ukraine announced on June 1, 2022, an increase in its military expenditures by approximately USD 8.3 million, nearly a 20% increase compared to previous years' spending. This increase is aimed at replacing weapons in the defense sector.
Ammunition Market Segment Insights
Application Insights
Based on application, the Ammunition Market is segmented into defense, and civil & commercial. The defense segment is projected to grow at a CAGR of 4.1% during the forecast period and accounted for 88.1% of the market share in 2022. Continuous modernization and upgrade programs by defense organizations worldwide, along with rising geopolitical tensions and increasing cross-border conflicts, are key drivers for this segment. Additionally, the ongoing global war on terrorism has heightened the need for ammunition for counter-terrorism operations.
Caliber Insights
The market is segmented by caliber into small, medium, large, and other calibers. The large caliber segment is expected to grow at a CAGR of 3.5% during the forecast period and held a 44.4% market share in 2022. This segment includes ammunition such as 50 mm, 105 mm, and 120 mm direct fire ammunition, supported by platforms like the Stryker Mobile Gun System (MGS) and Abrams Tank. Manufacturers have developed advanced generation kinetic energy rounds and multipurpose rounds, such as the M829A4 KE and XM1147 Advanced Multi-Purpose cartridge, to meet the growing demand.
Product Insights
The market is segmented by product into bullets, aerial bombs, grenades, artillery shells, and mortars. The bullets segment is expected to grow at a CAGR of 3.4% during the forecast period and accounted for 29.9% of the market share in 2022. Bullets are used in various applications, including target shooting, hunting, combat, and training, and are made from materials like lead, copper, steel, rubber, polymer, and wax. The demand for bullets is driven by the popularity of shooting sports, the need for military and law enforcement training, and advancements in bullet technology.
Component Insights
The market is segmented by component into fuse & primer, propellants, base, projectile & warhead, and others. The projectile & warhead segment is expected to grow at a CAGR of 3.5% during the forecast period and held 36.6% of the market share in 2022. This segment's growth is driven by increasing defense expenditures, military modernization programs, and the development of precision-guided ammunition.
Regional Insights
The Ammunition Market is segmented by region into North America, Europe, Asia-Pacific, and the Rest of the World. North America dominated the market with a 37.2% share in 2022, followed by Asia-Pacific and Europe with shares of 30.2% and 18.0%, respectively. Developing countries such as India and China are expected to show substantial growth throughout the forecast period.
North America
Military spending in North America is growing rapidly, driven by the procurement of advanced sea, land, and air vehicles, along with technological innovations. The region's market growth is attributed to ammunition procurement by local enforcement agencies, armed forces, and border security forces to mitigate threats from territorial conflicts, terrorism, and geopolitical tensions.
Europe
The European Ammunition Market is experiencing significant growth due to increased defense budgets, modernization efforts, and geopolitical tensions. For example, the European Defence Agency's (EDA) budget for 2023 reflects the region's commitment to strengthening national defense efforts.
Key Market Players
The ammunition market is highly competitive, with major players including:
- Olin Corporation (United States)
- General Dynamics Corporation (United States)
- BAE Systems (United Kingdom)
- Northrop Grumman (United States)
- Vista Outdoor Operations LLC (United States)
- Rheinmetall AG (Germany)
- Nammo AS (Norway)
- Nexter Group KNDS (France)
- CBC Global Ammunition (Brazil)
- Poongsan Corporation (Republic of Korea)
These companies compete on price, product quality, reliability, and compliance with government regulations. They focus on geographic expansion and service enhancement to thrive in the competitive market. The international actors are expected to strengthen their global presence through acquisitions and technological advancements.
Conclusion
The Ammunition Market is poised for significant growth driven by rising armed conflicts, geopolitical tensions, and the continuous modernization of military and law enforcement agencies. Technological advancements and increased defense expenditures will further propel market growth during the forecast period.
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