The Netherlands Defense Market: Market Attractiveness, Competitive Landscape and Forecast to 2024
The Netherlands defense budget is expected to reach US$17.9 billion in 2024, growing at a CAGR of 7.93%over the forecast period. The Netherlands has the 18th largest economy in the world and the sixth-largest in the European Union. During the historic period, the Netherlands military expenditure, which stands at US$12.4 billion in 2019, is anticipated to grow from US$13.2 billion in 2020 to value US$17.9 billion in 2024, registering a CAGR of 7.93%, over the forecast period. The growth will primarily be driven by the country’s military contributions to NATO operations.
The Netherlands is an active participant in joint operations with the European Union (EU) and peacekeeping operations with NATO and the United Nations (UN), and as such, seeks higher spending in terms of its defense sector. Although, military expenditure will be driven by modernization programs and the NATO mandate to spend a minimum of 2% of GDP on defense, the Netherlands is anticipated to allocate an average of 1.4% of GDP to defense over the forecast period. The country’s per capita defense expenditure is expected to increase from US$766.1 in 2020 to US$1,027.7 in 2024.
Over the forecast period, the country’s capital expenditure allocation is expected to average 25.2% of total expenditure, and revenue expenditure is expected to average 74.8%. Capital expenditure over the forecast period is expected to increase at a CAGR of 8.83%, from US$3.2 billion in 2020 to US$4.5 billion in 2024, due to the significant uptick in weapon procurement plans, and the procurement of defense equipment to replace outdated ones. Opportunities related to the procurement of defense equipment in Netherlands are expected to be in areas such as reconnaissance vehicles, M-Class Naval Vessels, multi-role Tanker-Transport, Wheeled Vehicle Replacement Program (DVOW), submarine replacement program.
The army accounted for the highest budget allocation during the historic period, with an average share of 14%. Over the forecast period, the army’s share is projected to remain unchanged. Navy expenditure - which represented an average share of 8.3% of defense expenditure during the historic period - is anticipated to decrease to an average share of 8.2% over the forecast period. The air force, which accounted for an average share of 7.8% during the historic period, is expected to account for a share of 7.7% of the defense budget over the forecast period.
After valuing US$11 million in 2014, defense imports recovered in between 2015-2018 and are set to increase over the forecast period due to the procurement of F-35s, armored vehicles, and modernization programs for naval vessels. During 2014-2018, Germany was the country’s main arms supplier, followed by the US, Italy. Aircraft, armored vehicles and missiles, occupy the majority of the market share of imports. Defense exports declined during 2014-2016, before rising in 2017, due to a reduction in procurements by Portugal, Greece, and Italy as a consequence of the weak economic climate. Over the forecast period, exports will recover, driven by procurements beyond Europe, including Jordan, Indonesia, the US, Canada, UAE, Mexico among others.
The report The Netherlands Defense Market: Market Attractiveness, Competitive Landscape and Forecast to 2024, offers detailed analysis of the Netherlands defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.
Companies mentioned: Boeing, Raytheon Missile Systems, Lockheed Martin, Leidos Inc, Honeywell International Inc, ARTEC GmbH, GKN Aerospace, Elbit Systems, Terma, SABCA, Krauss-Maffei Wegmann (KMW), Saab, Damen Schelde Naval Shipbuilding (DSNS), TNO Defense, Thales Nederlands, RH Marine Group
The report provides an in-depth analysis of the following -
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