U.S. Defense Spending Outlook

Cybersecurity, Smart Technologies, Agile Forces

In 2016, the growing U.S. defense industry is laser-focused on managing safety, costs and new technology.

But it’s faced with aging equipment, tight budgets and volatile fuel prices. To meet these challenges and expand intelligently, the sector must utilize responsive supply chains, more efficient R&D and smart financing.

Bouncing Back

Defense spending rebounds after years of reduced outlays, with a more stable government budget environment and a host of global security concerns that must be addressed.

U.S. DoD Budget, 2009-2016 U.S. DoD Budget, 2009-2016
U.S. DoD Budget Forecast 2018-2021 U.S. DoD Budget Forecast 2018-2021

DoD Contracted Spend is Forecasted to Continue to Grow

U.S. DoD Budget 2016-2021: Contracted vs. Internal Expenditures (in billions) U.S. DoD Budget 2016-2021: Contracted vs. Internal Expenditures (in billions)
U.S. DoD Spending Targets, 2015 U.S. DoD Spending Targets, 2015
U.S. DoD Budget Request (FY 2017) U.S. DoD Budget Request (FY 2017)

Force Rebalancing

Average Aircraft Age, U.S. Air Force Average Aircraft Age, U.S. Air Force
Coming Online Coming Online

Defense Sector M&A

Defense contractors seek acquisitions to spur growth and gain efficiencies. Top-tier contractors like Lockheed Martin, Boeing and General Dynamics may enhance their capabilities through mergers and acquisitions (M&As) of companies specializing in cybersecurity, surveillance, analytics and drones.

Notable Deals Notable Deals
Aerospace, Defense & Government M&A activity since 2013 Aerospace, Defense & Government M&A activity since 2013

Defense Engages Innovators

Innovation outside the industry is a treasure trove for defense and aerospace.

Defense Engages Innovators Defense Engages Innovators
Sources: Federal Budget Forecasts from NextFed Inc., BGA Aeroweb, Defense Mergers & Acquisitions, Deloitte, InfoBase Publishers, Inc., KPMG, Pricewaterhouse Coopers, SECDF, U.S. Air Force, U.S. Government Accountability Office