Global Defense Industry Suppliers: CEO Business Outlook Survey 2012–2013

Lon­don, May 15th, 2012 – Over­all, through­out the glob­al defense sup­pli­er indus­try, 44% of C-lev­el respon­dents are ‘more opti­mistic’ about rev­enue growth for their com­pa­ny over the next 12 months rel­a­tive to the pre­vi­ous 12 months. A fur­ther 31% of C-lev­el respon­dents are ‘neu­tral’ about rev­enue growth, as com­pared with 22% who are ‘less opti­mistic’ about their company’s rev­enue prospects.

33% of C-lev­el respon­dents expect an increase in mar­ket­ing expen­di­ture of between 1% to 10% in 2012, while only 5% of respon­dents expect a decrease of between 1% and 10% (ref­er­ence see graph below). Mar­ket­ing bud­gets of glob­al defense sup­pli­er indus­try sup­pli­er com­pa­nies are expect­ed to rise by an aver­age of 8.8% over the next 12 months. Sup­pli­ers’ C-lev­el respon­dents plan to spend more on ‘email pro­mo­tions’. For C-lev­el respon­dents, media chan­nels such as ‘email pro­mo­tions’, ‘email edu­ca­tion­al mes­sages’, ‘webi­na­rs’, and ‘web con­fer­enc­ing’ are still the best way of com­mu­ni­ca­tion and adver­tis­ing.

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C-lev­el exec­u­tives from the glob­al defense sup­pli­er indus­try expect increased lev­els of con­sol­i­da­tion over the next 12 months. Of all C-lev­el respon­dents, 57% project either a ‘sig­nif­i­cant increase’ or an ‘increase’ in M&A. How­ev­er, 32% of C-lev­el respon­dents expect no change in con­sol­i­da­tion activ­i­ties in 2012. The expect­ed lev­els of con­sol­i­da­tion in the indus­try could be due to new cost or demand pres­sures, repay­ment of debt, the poten­tial need to meet new com­pli­ance pro­ce­dures, quick access to new mar­kets, busi­ness expan­sion, and an increase in mar­ket share. Addi­tion­al­ly, sup­pli­ers reveal that they will increase cap­i­tal expen­di­ture towards‘new prod­uct devel­op­ment’ and ‘machin­ery and equip­ment purchase’over the next 12 months.

Glob­al defen­sein­dus­try respon­dents iden­ti­fy the Mid­dle East to be the most impor­tant region for growth among emerg­ing mar­kets, fol­lowed by India, Chi­na, and Brazil. Defense expen­di­ture across the Mid­dle East is expect­ed to grow by 14% in 2011–2016, with Sau­di Ara­bia and the UAE emerg­ing as the key spenders. The major­i­ty of the region’s mil­i­tary expen­di­ture is aimed to upgrade exist­ing equip­ment and aug­ment­ingde­fense capa­bil­i­ties, and these mea­sures have pri­mar­i­ly been adopt­ed to counter the increas­ing threat from nuclear capa­ble coun­tries, home­land secu­ri­ty con­cerns, and to pro­tect crit­i­cal infra­struc­ture.

On the oth­er hand, accord­ing to 44% of C-lev­el respon­dents, South Korea is expect­ed to project the great­est demand for defense prod­ucts and ser­vices in 2012–2013. Addi­tion­al­ly, 40% of C-lev­el respon­dents chose Sin­ga­pore, Tai­wan and Hong Kong, and 31% chose USA, as their pre­ferred invest­ment des­ti­na­tions.

About ICD Research

ICD Research is a full-ser­vice glob­al mar­ket research agency and pre­mi­um busi­ness infor­ma­tion brand spe­cial­iz­ing in indus­try analy­sis in a wide set of B2B and B2C mar­kets. ICD Research has access to over 400 in-house ana­lysts and jour­nal­ists and a glob­al media pres­ence in over 30 pro­fes­sion­al mar­kets enabling us to con­duct unique and insight­ful research via our trust­ed busi­ness com­mu­ni­ties. Through its unique B2B and B2C research pan­els and access to key indus­try bod­ies, ICD Research deliv­ers insight­ful and action­able analy­sis. The ICD Research sur­vey capa­bil­i­ties grant read­ers access to the opin­ions and strate­gies of key busi­ness deci­sion mak­ers, indus­try experts and com­peti­tors as well as exam­in­ing their actions sur­round­ing busi­ness pri­or­i­ties.

About Strate­gic Defence Intel­li­gence

This report is one of a series avail­able to sub­scribers of our pre­mi­um research plat­form, Strate­gic Defence Intel­li­gence. Strate­gic Defence Intel­li­gence pro­vides a stream of con­tin­u­ous­ly updat­ed cus­tomer and com­peti­tor intel­li­gence, as well as detailed research reports pro­vid­ing an unri­valled source of glob­al infor­ma­tion on the lat­est devel­op­ments in the defence indus­try.

Strate­gic Defence Intelligence’s unique mon­i­tor­ing plat­form tracks glob­al defence activ­i­ty for over 2,500 com­pa­nies and 65 prod­uct cat­e­gories in real time and in a high­ly struc­tured man­ner, giv­ing a com­pre­hen­sive and eas­i­ly-search­able pic­ture of all defence indus­try activ­i­ty. The site fea­tures: dai­ly updat­ed analy­sis, com­ment and news, com­pa­ny and cus­tomer pro­files, defence spend­ing, ten­ders and con­tracts, prod­uct and tech­nol­o­gy intel­li­gence, a research and analy­sis data­base pro­vid­ing access to indus­try and com­peti­tor reports to enable busi­ness and mar­ket plan­ning, and ful­ly cus­tomiz­able tools, includ­ing instant per­son­al­ized report gen­er­a­tion and cus­tom alerts.