Spain - Defense and Security: Modernization programs to drive expenditure (Strategy, Performance and Risk Analysis)
The aircraft category is a key growth driver of the Spanish defense and security industry, accounting for 54.8% of capital expenditure in 2016; followed by the C4ISR electronics and IT category with 13.6%. The country’s defense expenditure stood at US$7.7 billion in 2016 and will post a forecast-period CAGR of 3.8% to reach US$8.3 billion in 2021. Military procurement programs, security threats from terrorist organizations auch as Euskadi ta Askatasuna, territorial disputes with Morocco, and illegal drug transit will be the key drivers.
MarketLine’s premium reports provide a comprehensive overview of each market within a country’s defense industry; benchmark key performance indicators against regional and global peers; review industry trends and drivers; evaluate the competitive landscape and innovation potential of singular markets; and conduct data-driven SWOT analysis to ascertain a structured assessment of the performance of each territory represented.Key Highlights
Spain to focus on joint venture programs:
The Spanish government is encouraging domestic defense firms to collaborate with foreign defense organizations from France and Germany to enhance the country’s technological capabilities. In an effort to increase R&D, the government has built technology centers with a combined workforce of over 2,000 personnel.
Spain focuses on homeland security:
The Spanish government’s expenditure on homeland security stood at US$10.0 billion in 2016 and will post a forecast-period CAGR of 1.3% to reach US$10.5 billion in 2020. The expected increase in expenditure is due to the country’s growing focus on containing drug trafficking, illegal immigration and terrorist activities. Recent turmoil in the North African region has exacerbated problems relating to illegal immigration, thereby increasing the urgency of acquiring enhanced border security and control systems.
Spain reported a decline in its capital expenditure:
Spain’s capital expenditure on defense stood at US$874.8 million in 2012 and gradually declined to US$678.5 million in 2016. It will post a forecast-period CAGR of 4.2% to reach US$695.5 million in 2021. The decline in capital expenditure was due in part to the European debt crisis, causing the government to take austerity measures. It led to a reduction in the procurement of military aircraft and other arms contracts during 2012-2016 and caused delays or cancellations to defense projects because of a rise in project costs.
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