IMDEX Asia 2019: Warship growth set to peak by 2025
The global market for warships is substantial, but is set to peak within the next five years according to a new analysis by Shephard Media.
Shephard’s ‘Naval Vessels Forecast 2019-2029’, released on 7 May, shows that the global market for new procurement of military platforms will be worth $838 billion over the next ten years.
ABOVE: HMAS Newcastle (left) is one of four Adelaide-class guided-missile frigates (FFG) in service with the Royal Australian Navy. (Photo: Gordon Arthur)
However, while annual spending globally is expected to increase from $77 billion in 2019 to $82 billion in 2024 across all classes of vessels, from 2025 onwards the market will decrease in size as major programmes come to a close.
Shephard’s report covers 462 procurement programmes and requirements for major surface combatants, patrol vessels and submarines, and shows – perhaps unsurprisingly – that the US is the single largest market.
According to the report, this is valued at a total of $289 billion through to 2029, with the nation’s plan to build a 355-ship navy by the middle of the 2030s driving a high level of investment. ‘Significantly for suppliers, $111 billion of this is for contracts that are yet to be awarded, so there is a tremendous opportunity across the entire supply chain,’ the report notes.
ABOVE: Global market overview by naval vessel type, 2019-29, US$ 000.
One of the key influencing factors is growth in China’s naval capability. The report states that Shephard expects China to spend $123 billion in expanding its blue-water fleet over the next ten years, continuing a process of investment in its domestic shipbuilding infrastructure.
Despite fears that China is ‘catching up’ with the US, Shephard forecasts that the latter will still spend more than twice as much as the Asian nation on submarine and warship procurement over the next decade.
Outside of these two major players, India represents the largest single opportunity for growth, as it is forecast to spend $51 billion in total, of which nearly $24 billion is yet to be awarded across seven major programmes.
Annual spending globally is expected to increase from $77 billion in 2019 to $82 billion in 2024 across all classes of vessels. From 2025 onwards, the market will decrease in size as major programmes come to a close.— Shephard Media
However, Delhi has longstanding difficulties in procuring major defence systems – whether that be through export or indigenous manufacture – and programmes have a history of delays and cost overruns.
The main challenges that the country faces in terms of defence projects are inadequate skills within government acquisition and programme management, as well as bureaucracy and slow decision-making.
The ‘Make in India’ initiative has also struggled to deliver improvements to the nation’s overall defence industry, primarily due to the lack of technical capabilities of domestic companies, according to the report.
ABOVE: The ‘Make in India’ initiative has also struggled to deliver improvements to the nation’s overall defence industry. (Photo: Gordon Arthur)
Asia-Pacific as a whole is witnessing a surge in naval procurement as it reacts to growing capabilities among neighbouring countries. Excluding China and India, nations in the region are expected to spend in excess of $95 billion by the end of 2029.
Taiwan in particular has three major programmes, with outstanding requirements for an indigenous submarine, a new guided-missile destroyer and a new frigate.
Watch the below video to learn more about what is contained within Shephard Media’s ‘Naval Vessels Forecast 2019-2029’ and read the executive summary here.
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