Defense Spending in United States

Defense Spending in United States

The US defense spending market had total budget allocation of $721.5bn in 2020, representing a compound annual growth rate (CAGR) of 3.9% between 2016 and 2020. In comparison, the European and Asia-Pacific markets grew with CAGRs of 3.7% and 4.8% respectively, over the same period, to reach respective values of $343.6bn and $497.8bn in 2020.

The market has grown moderately during the past five years, with significant growth recorded in 2018. The 2018 US budget, set out by the Republican administration, increased the budget of the Department of Defense by $52bn, an increase of 9%. Part of this funding was allocated to the US-Mexico border wall, an election promise of former President Donald Trump, according to Budget Director Mick Mulvaney.

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Market consumption volume increased with a CAGR of 0.5% between 2016 and 2020, to reach a total of 1.37 million active serving personnel in 2020. The market's volume is expected to fall to 1.34 million active serving personnel by the end of 2025, representing a compound annual rate of change (CARC) of -0.4% for the 2020- 2025 period. The air force segment accounted for the market’s highest value in 2020, with a total budget allocation of $204.0bn, equivalent to 28.3% of the market's overall value. The navy segment contributed a budget allocation of $198.1bn in 2020, equating to 27.5% of the market's aggregate value. The performance of the market is forecast to decelerate, with an anticipated CAGR of 1.6% for the five-year period 2020 - 2025, which is expected to drive the market to a value of $779.4bn by the end of 2025. The report includes many other significant findings as well.

Other major findings discussed in the report:

• Market value: The United States defense spending market grew by 1.3% in 2020 to reach a value of $721.5 billion. The compound annual growth rate of the market in the period 2016–20 was 3.9%

• Market volume: The United States defense spending market grew by 0.4% in 2020 to reach a volume of 1,374.7 thousand active serving personnel. The compound annual growth rate of the market in the period 2016–20 was 0.5%

• Category segmentation: Air force is the largest segment of the defense spending market in the United States, accounting for 28.3% of the market's total value. The Navy segment accounts for a further 27.5% of the market

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