Defense electronics spending returning to normal after six-plus years of fat post-9/11 budgets

April 16, 2008
NEWTOWN, Conn., 16 April 2008. The U.S. defense electronics market will decline by 55.6 percent over the next 10 years, from a high of $15.05 billion in 2008 to $6.68 billion in 2017, in a return to pre-9/11 levels, according to market researchers at Forecast International in Newtown, Conn.

NEWTOWN, Conn., 16 April 2008. The U.S. defense electronics market will decline by 55.6 percent over the next 10 years, from a high of $15.05 billion in 2008 to $6.68 billion in 2017, in a return to pre-9/11 levels, according to market researchers at Forecast International in Newtown, Conn.

This downward trend indicates that the defense electronics market is not necessarily down over the long term, but is simply returning to normal levels similar to those before the September 2001 terrorist attacks on the World Trade Center and the Pentagon, analysts say.

The domestic defense electronics market will be worth at least $102.6 billion from 2008 to 2017, according to Forecast International's report entitled 2008 Overview of the U.S. Defense Electronics Market.

"The long-predicted post-9/11 market correction is in effect," says Richard Sterk, senior analyst at Forecast International. "The drawdown in American defense electronics spending has started."

In strong demand are technology and systems to counter and defeat an unconventional enemy using unconventional weapons such as electronically detonated improvised explosive devices (IEDs) made from commonly available electronics appliances. "This favorite weapon of insurgents and terrorists has resulted in the funneling of some long-neglected funding back into the electronic warfare segment," Sterk says.

The top five defense electronics companies in the U.S. continue to draw from the upper echelons of corporate America. As determined by the sampling within this study, the top five are Raytheon, Northrop Grumman, Lockheed Martin, General Dynamics, and ITT.

"If anything, one may see a somewhat underfunded market for a years," says Sterk, explaining this correction as a budgetary necessity to make up for the rushed spending and borrowed funding that followed the 9/11 terrorist attacks. The majority of these rushed programs have run their course, and the defense electronics market is reverting to a pre-9/11 environment.

For more information contact Forecast International online at www.forecastinternational.com.

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