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New study: Italy's defense industry forecasts to 2022

Military Market Research

HTF Market Intelligence released a new research report on title 'Italy defense Market with detailed analysis, forecast and strategies’. The study covers geographic analysis that includes regions and important players/vendors.

Italy is one of the largest defense spenders in Europe and is projected to spend US$77.5 Billion cumulatively on its armed forces during the forecast period. In 2013, the Italian Government allocated US$19.9 Billion to the defense budget but this declined to US$15.5 Billion in 2017, recording a negative CAGR of 6.04% during 2013-2017.

Eurozone debt crisis has highlighted a number of structural economic weaknesses in Italy. Despite having an advantage in various fields, a lack of structural reforms has been the major reason for Italy’s declining productivity.

The allocation to the defense sector hit an all-time low in 2016 as a result of falling GDP and although the spending on defense recovered marginally in 2017, it is expected to be temporary and the country’s defense related expenditure is likely to decrease over the next two years until 2019.

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The country’s defense budget stands at US$15.5 Billion in 2017 and is expected to reach US$15.9 Billion in 2022. Cumulatively, the defense budget is expected to be US$77.5 Billion over the forecast period. It is anticipated that the defense budget will record a CAGR of 0.92% during the forecast period in contrast to the CAGR of -6.04% registered during the historic period.

Air Force expenditure stands at US$2.7 Billion in 2017, which is forecast to reach US$2.8 Billion in 2022.This expenditure is expected to be fuelled by the continuing procurement of F-35 fighter aircraft, transport helicopters, and unmanned aerial system (UAS) mission trainers over the forecast period. The Italian Navy expenditure is expected to increase slightly from US$2.1 Billion in 2017 to US$2.2 Billion in 2022.

During 2012 to 2016, Italy’s defense exports grew significantly as a result of expansion into Asian and Middle Eastern markets such as UAE, Saudi Arabia, Pakistan, Singapore, UAE, and Israel. The demand for defense equipment was strong in these countries. The key exports were advanced technology equipment such as aircraft, naval vessels, sensors, armored vehicles, naval weapons, missiles, air defense systems, and satellites among others. Major recipients of Italian exports were Turkey, UAE, and Algeria which accounted for 14.2%, 11.1% and 8.0% of overall Italian exports respectively, largely involving military aircraft and naval vessels.

The report “Future of the Italy defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022” offers insights into the market opportunities and entry strategies adopted by foreign OEMs (original equipment manufacturers) to gain a market share in the Italian defense industry.

In particular, it offers in-depth analysis of the following -

- Market opportunity and attractiveness: Detailed analysis of the current industry size and growth expectations during 2018-2022, including highlights of the key growth stimulators. It also benchmarks the industry against key global markets and provides detailed understanding of emerging opportunities in specific areas.
- Procurement Dynamics: Trend analysis of imports and exports, together with their implications and impact on the Italian defense industry.
- Industry Structure: Five forces analysis to identify various power centers in the industry and how these are expected to develop in the future.
- Market Entry Strategy: Analysis of possible ways to enter the market, together with detailed descriptions of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.
- Competitive Landscape and Strategic Insights: Analysis of the competitive landscape of the defense industry in Italy, providing an overview of key defense companies (both domestic and foreign), together with insights such as key alliances, strategic initiatives, and a brief financial analysis.
- Business Environment and Country Risk: A range of drivers at country level, assessing business environment and country risk. It covers historical and forecast values for a range of indicators, evaluating business confidence, economic performance, infrastructure quality and availability, labor force, demographics, and political and social risk.


- Italy is one of the largest defense spenders in Europe and is projected to spend US$77.5 billion cumulatively on its armed forces during the forecast period. In 2013, the Italian Government allocated US$19.9 billion to the defense budget but this declined to US$15.5 billion in 2017, recording a negative CAGR of 6.04% during 2013-2017. However, with growing security concerns and modernization plans, the forecast period is set to witness positive growth. Italian defense expenditure is expected to be primarily driven by increasing terror threats, participation in peacekeeping initiatives, the replacement of aging military equipment, and the modernization of defense forces with advanced technology equipment.
- On a cumulative basis, the country is expected to invest US$77.5 billion for defense purposes, of which US$13.3 billion is earmarked for capital expenditure to fund defense procurements.
- The government’s focus on revitialising its economy is anticipated to result in cutbacks in defense spending and although the Italian defense budget is likely to recover over the forecast period, it neverthe less is anticipated to grow marginally.
- The MoD is expected to invest in fighters and multirole aircraft, frigates and transport and utility helicopters.

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Reasons to access

- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Italian defense industry market trends for the coming five years
- The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
- Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
- A deep qualitative analysis of the Italian defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts

Companies Mentioned in the Report

MBDA and Elettronica

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Table of Contents
1. Introduction 8
1.1. What is this Report About? 8
1.2. Definitions 8
1.3. Summary Methodology 10
1.4. About Strategic Defence Intelligence 11
2. Executive Summary 12
3. Market Attractiveness and Emerging Opportunities 14
3.1. Current Market Scenario 15
3.1.1. Primary threat perception 15
3.1.2. Military Doctrine & Strategy 16
3.1.3. Military Fleet Size 17
3.1.4. Procurement Programs 21
Ongoing procurement programs 21
Future procurement programs 22
3.1.5. Social, Political and Economic Environment & Support for Defense Projects 23
3.1.6. Political and Strategic Alliances 24
3.2. Defense Market Size Historical and Forecast 25
3.2.1. Italian annual defense expenditure expected to reach US$15.9 billion in 2022 25
3.2.2. Modernization of defense systems, peacekeeping initiatives, maintaining NATO, EU, and UN stipulations, and increasing terrorism activities are expected to drive Italian defense expenditure 27
3.2.3. Defense expenditure as a percentage of GDP is expected to average 0.8% during the forecast period 28
3.3. Analysis of Defense Budget Allocation 30
3.3.1. The majority of Italy’s defense budget is allocated for revenue expenditure 30
3.3.2. Overall capital expenditure is expected to grow at a CAGR of 2.34% during the forecast period 32
3.3.3. Common services leads the defense budget allocation with 37.5% share during 2013 to 2017 34
3.3.4. Army expenditure expected to reach US$5.2 billion by 2022 36
3.3.5. Air force expenditure expected to grow at CAGR 0.94% during forecast period 38
3.3.6. Cumulative navy expenditure expected to be US$10.6 billion during the forecast period 40
3.3.7. Common services expenditure is expected to reach US$5.3 billion in 2022 42
3.4. Homeland Security Market Size and Forecast 44
3.4.1. Homeland security expenditure expected to reach US$6.8 billion in 2022 44


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