Northbrook, IL 60062 -- (SBWIRE) -- 01/05/2023 -- According to a research report "Ammunition Market by Application (Defense, Civil & Commercial), Caliber (Small, Medium, Large), Product (Bullets, Aerial Bombs, Artillery Shells, Mortars), Component, Guidance Mechanism, Lethality (Lethal, Less-lethal), Region - Forecast to 2026" published by MarketsandMarkets, the global ammunition market size is projected to grow from USD 24.3 billion in 2021 to USD 29.1 billion by 2026, at a CAGR of 3.7% from 2021 to 2026.
The factors such as the increase in the geopolitical tensions, territorial conflicts, and political unrest across the globe; rising military expenditure, leading to modernization and upgradation of armed forces change in the nature of warfare modernization programs undertaken by military forces in major economies, militarization of police forces are driving factors assisting the growth of the ammunition market. Apart from its use in defense forces, ammunition also sees increasing importance in civil and commercial applications such as sporting, hunting, and self-defense, among others.
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Modernization programs undertaken by military forces is driving the growth of the defense applications
The defense segment of the ammunition market has been classified into military and homeland security. The growth of the defense segment of the ammunition market can be attributed to the increased spending of countries on military modernization programs, as well as the rise in terrorist activities and civil disturbances in several parts of the world. The five top and biggest spenders were the US, China, India, Russia, and UK. The countries together accounted for 62% of world's military expenditure.
This expenditure in 2021 increased approximately by 4.0% in Europe, by 2.5% in Asia and Oceania, with 3.9% in the Americas, and by 5.1% in Africa. However, military spending in the Middle East region decreased by 7.2%. The increase of military expenditure was largely due to the fact that most countries in the world experienced severe economic downturns in 2021 related to the Covid-19 pandemic, while military expenditure continued to rise overall to safeguard the nations from internal as well as external threats.
Based on caliber, the small caliber segment of the ammunition market is projected to witness the highest CAGR during the forecast period
Based on caliber, the ammunition market has been segmented into small, medium, large, and others. The small caliber segment is projected to grow at the highest CAGR during the forecast period. The growth of this segment can be attributed to increased use of small caliber ammunition by military and homeland security personnel, owing to less lethality of this ammunition. Moreover, open online marketplaces for small arms and ammunition and increased procurement of small caliber ammunition by the defense and homeland security sectors to curb rising instances of armed conflicts are also contributing to the growth of this segment.
Since the COVID-19 crisis, a significant reduction in demand is being observed in civil and commercial applications across the world. Civil & commercial applications consist of hunting, sporting, self-defense, and others. A reduction in demand for hunting and sporting applications for small caliber ammunition has been observed due to the continuous lockdown regulations and social distancing measures. Small caliber ammunition is majorly used in civil & commercial applications, and therefore this dip in demand is set to affect the overall ammunition market to some extent during the forecast period.
Bullets segment of the ammunition market is projected to witness the highest CAGR owing to increasing focus on upgrading of air force inventory by armed forces
Based on products, the ammunition market has been segmented into bullets, aerial bombs, grenades, artillery shells, and mortars. The bullets segment is projected to grow at the highest CAGR. In recent years, an increasing focus has been observed to upgrade land as well as air force inventory across the globe due to multiple reasons such as geopolitical tensions and air force applications. For instance, the US has ongoing F-35 fighter aircraft programs. Whereas the Indian air force is looking for multi-role aircraft to strengthen their armed forces, and hence new aircraft procurements will lead to an increased demand for related ammunition in the coming years. Hanwha Corporation (South Korea) and General Dynamics Corporation (US) manufacture aerial bombs for applications.
The North American market is projected to contribute the largest share from 2021 to 2026
The ammunition market in the North American region has been studied for the US and Canada. Major factors that are expected to drive the growth of the market in the region include rising instances of terrorism, which have led to increased use of ammunition by armed forces and a growing number of drug cartels in Central America
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North American countries are awarding a number of contracts to major players of the ammunition market for the delivery of ammunition, thus driving the growth of the ammunition market in the region. For instance, In July 2020, Northrop Grumman Corporation secured a contract from the US Army to deliver the next-generation airburst cartridge for the 30mm XM813 Bushmaster Chain Gun. The Bushmaster Chain Gun will be installed on the Stryker Infantry Carrier Vehicle (ICV). Also, the company has secured a contract worth USD 93 million from the US Army for the manufacture of multipurpose munition technology for destroying targets such as lightly armored infantry fighting vehicles. The munitions are expected to be compatible with the M4A1 rifle.
The ammunition market is dominated by a few globally established players such as Northrop Grumman Corporation (US), CBC Global Ammunition (Brazil), BAE Systems (UK), Thales Group (France), and General Dynamics Corporation (US), among others.