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Military logistics market to increase at a CAGR of 5.69%

Industry Sector

Defence

Published

19 September 2012

Author

Matt Bodimeade

Type of News

Market

The global military logistics market has been forecast to increase at a compound annual growth rate (CAGR) of 5.69% over the next 10 years, increasing from a value of US$28.6 billion in 2012, to reach its peak of US$49.7 billion by 2022.

The market consists of three categories of military logistics systems: Force Management, Installations Support, and Central Logistics.

The force management market is expected to account for 76% of the global military logistics market, followed by installations support with a share of 18% and central logistics with the remaining 6%.

A key factor driving growth within the military logistics market is that many nations globally are currently focusing on modernizing their military infrastructure and related logistics.

Countries are moving away from the policy of 'brute force logistics' in which troops were responsible for sorting materials from huge inventories, towards a more efficient system that promotes precise accounting of consumption and replenishment in order to maximize efficiency.

The military logistics sector is currently witnessing a phase of moderate M&A activity in keeping with the trend of sector consolidation when military demand falls.

As defence spending has levelled off in recent years, companies operating in all areas of defence are looking to diversify their offerings in order to compete for the various contracts on offer and add more revenue streams to their existing lines of business.

Despite budget cuts, North America is expected to account for the largest share of the total global expenditure on military logistics, with an 81% share over the next decade. High demand in the region is predominantly driven by the region's logistics modernisation programs and the overseas war against global terrorism.

For more information on the military logistics market, see the latest research: Military Logistics Market Report

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