Guided Munitions Market

• Growing demand for defense programs is driving the market growth

Market CAGR for guided munitions is being driven by the rising demand for defense programs to defend the nation against several threats. There is a rising demand from defense organizations for precision-guided missiles and rockets, increased military spending, and also to reduce collateral damages. The rising defense budgets throughout the  economies are fueling market growth. The growing terrorist activities, and rising utilization of smart weapons are some of the crucial factors increasing the demand for guided munitions.

The rising national security concerns and the idea that some nations can cede their diplomatic, security, and economic interests to others are expected to boost the growth of missiles and rockets demand in the defense industry, therefore, adding up to the growth of the market. An important component of military operations is the vigorous utilization of  positioning systems and inertial navigation systems that can pinpoint the target, whether mobile or stationary and precisely target and destroy it with the least amount of time and collateral damage.

There is rising demand for precision attacking techniques in the army, navy, and air force. The development of telecommunication technologies has gone through a radical change owing to the changing nature of the  economy, further improving the effectiveness of rockets and missiles in combat situations. The nations are extensively emphasized gaining a piece of technologically advanced warfare equipment in order to showcase their dominance in the  scenario.

The introduction of new technologies and advancements of new-generation missile and air systems is a major driving factor for the guided munition industry growth. These advancements in missile fuel the demand for defense shields, which can surge the market demand for guided munition. Governments throughout the globe are engaged in advancing their stealth aircraft and also making investments in superior surveillance systems to combat stealth technologies.

Therefore, the continuous improvements for a new generation of guided air and missile defense systems are anticipated to boost the demand for different technologies related to guided munition like laser, INS, GPS, radar, etc, hence creating a demand for the products. Thus, driving the Guided Munitions market revenue.

However, the extremely complicated weapon guidance system can be one of the major factors hampering the growth of the market. Also, the high cost of production might affect the growth of the market ly.

Geopolitical tensions across various regions are driving the demand for guided munitions in the Global Guided Munitions Market Industry. Ongoing conflicts and territorial disputes compel nations to bolster their military arsenals, leading to increased procurement of advanced munitions. For example, tensions in Eastern Europe and the Asia-Pacific region have prompted countries to invest heavily in guided weaponry to ensure national security. This environment of uncertainty is likely to sustain demand for guided munitions, as nations seek to deter potential threats. The market's growth trajectory, with a projected CAGR of 3.86% from 2025 to 2035, reflects the ongoing need for enhanced military capabilities in response to these geopolitical challenges.

The Global Guided Munitions Market Industry is poised for substantial growth, with projections indicating a market size of 26.0 USD Billion in 2024 and an anticipated increase to 39.4 USD Billion by 2035. This growth trajectory suggests a robust demand for guided munitions driven by various factors, including technological advancements and geopolitical tensions. The market is expected to experience a compound annual growth rate (CAGR) of 3.86% from 2025 to 2035, reflecting the ongoing evolution of military strategies and the increasing reliance on precision-guided munitions. These projections underscore the importance of guided munitions in contemporary military operations and the need for continuous innovation in this sector.

The Global Guided Munitions Market Industry is experiencing a notable surge due to increasing defense budgets across various nations. Countries are prioritizing modernization and enhancement of their military capabilities, which has led to substantial investments in guided munitions. For instance, in 2024, the market is projected to reach 26.0 USD Billion, reflecting a growing emphasis on precision strike capabilities. Nations such as the United States and India are significantly boosting their defense spending, which is likely to drive demand for advanced guided munitions. This trend indicates a shift towards more sophisticated weaponry, enhancing operational effectiveness in military engagements.

Technological advancements play a pivotal role in shaping the Global Guided Munitions Market Industry. Innovations in guidance systems, such as GPS and laser guidance, have improved the accuracy and effectiveness of munitions. These advancements not only enhance the lethality of guided munitions but also reduce collateral damage, making them more appealing to military forces. The integration of artificial intelligence and machine learning into targeting systems is expected to further revolutionize the industry. As these technologies evolve, they are likely to contribute to the market's growth, with projections indicating a rise to 39.4 USD Billion by 2035, showcasing the potential for enhanced operational capabilities.

The Global Guided Munitions Market Industry is witnessing a paradigm shift towards precision warfare, which emphasizes the use of guided munitions to achieve strategic objectives with minimal collateral damage. This shift is driven by the recognition that precision strikes can lead to more effective military operations while reducing civilian casualties. As military doctrines evolve, the demand for precision-guided munitions is expected to rise significantly. This trend aligns with the broader defense strategy of many nations, which increasingly prioritize operational efficiency and effectiveness. The market's expansion is indicative of this shift, as military forces adapt to modern warfare requirements and invest in advanced guided munitions.

Emerging markets are becoming increasingly important players in the Global Guided Munitions Market Industry, as nations in regions such as Asia and the Middle East enhance their defense capabilities. Collaborative defense initiatives and partnerships are fostering the development and procurement of guided munitions. Countries are engaging in joint ventures and technology transfers to bolster their military capabilities. This trend is likely to accelerate market growth, as emerging economies recognize the strategic importance of guided munitions in modern warfare. The collaborative efforts among nations to enhance defense capabilities are expected to contribute to the overall expansion of the market, reflecting a dynamic shift in global defense strategies.

By region, the study gives market insights into North America, Europe, Asia-Pacific, and the Rest of the World. The North American Guided Munitions market area dominates the market due to the availability of key market players and continuous investments in the R&D activities for developing new and advanced technology to penetrate the missile defense system. Further, the military developments throughout the region are also expected to improve artillery and missiles, thus boosting the market growth in this region.

Further, the prime countries studied in the market report are the US, Canada, German, France, the UK, Italy, Spain, Japan, India, China, Australia, South Korea, and Brazil.

Figure 2:  GUIDED MUNITIONS MARKET SHARE BY REGION 2022 (USD Billion)

Source The Secondary Research, Primary Research, Market Research Future Database, and Analyst Review

The Asia-Pacific Guided Munitions Market accounts for the second-largest market share due to the escalating geopolitical conflicts and the rising threat of terrorist attacks, and in response to increasing national security concerns, the countries in this region are investing largely in modernizing their armed forces. Moreover, China’s Guided Munitions market held the largest market share, and the Indian Guided Munitions market was the rapid-growing market in the Asia-Pacific region.

Europe's Guided Munitions market is expected to grow at the fastest CAGR from 2023 to 2032. This is due to their initiative to boost their cutting-edge and aggressive defense industrial base for the defense weapons system in this region. Further, the German Guided Munitions market held the largest market share, and the UK Guided Munitions market was the rapid-growing market in the European region.

Leading market players are investing heavily in research and development in order to expand their product lines, which will help the Guided Munitions market grow even more. Market players are also undertaking a variety of strategic activities to expand their  footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the Guided Munitions industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the  Guided Munitions industry to benefit clients and increase the market sector. In recent years, the Guided Munitions industry has offered some of the most significant advantages to the defense sector. Major players in the Guided Munitions market, including BAE Systems Plc, Vertex Company, PTC Industries, Lockheed Martin Corporation, Raytheon Company, General Dynamics Corporation, Israel Aerospace Industries Ltd, Textron Inc., Hanwha Group, Northrop Grumman Corporation, and others, are attempting to increase market demand by investing in research and development operations.

BAE Systems, Inc., the US subsidiary of BAE Systems plc, is an international defense, security, and aerospace company. The company offers some of the world's most advanced, technology-led defense, security solutions, and aerospace. The company delivers a full range of services and products for air, land, and naval forces and also advanced electronics, information technology solutions, security, and customer support services. In July 2020, the above UK-based aerospace company acquired the Collis Aerospace Military  Positioning System (GPS) businesses from Raytheon Technologies Corporation for 1.9 billion dollars.

This will help BAE to expand GPS anti-spoofing and anti-jamming technology, which is important for a range of defense missions. Raytheon Technologies is a US-based aerospace and defense company that specializes in precision munitions and missiles.

The Vertex Company offers vertically integrated turnkey lifecycle support from concept definition to engineering and manufacturing; the company provides aviation maintenance,  contractor logistics support, specialized onsite mission execution, systems engineering and integration, high-consequence training programs, and integrated supply-chain solutions. In December 2021, the company acquired Raytheon Technologies' defense training and mission-critical solutions business lines for an undisclosed amount. This deal will assist the company in extending into highly specialized value-added technology solutions and services, including commercial training, mission-critical support solutions, and engineering and modernization capabilities. Raytheon Technologies is a US-based aerospace and defense company specializing in precision munitions and missiles.