USA Rocket and Missile Market Outlook to 2030

USA Rocket and Missile Market Overview

• The USA Rocket and Missile Market was valued at USD 16.25 billion in 2023. This growth is primarily driven by increased defense spending, technological advancements, and heightened geopolitical tensions that have necessitated the development and procurement of advanced missile systems. The demand for precision-guided missiles and advancements in hypersonic technologies have also contributed to the market's expansion.

• The market is dominated by major defense contractors, including Lockheed Martin, Raytheon Technologies, Boeing, Northrop Grumman, and General Dynamics. These companies play a pivotal role in the research, development, and production of advanced rocket and missile systems for the U.S. Department of Defense and allied nations. Their extensive portfolios and continuous innovation in missile technology position them as leaders in this market.
• In December 2023, Raytheon successfully conducted a test of an Exoatmospheric Kill Vehicle, which is part of the Ground-based Midcourse Defense (GMD) system. This test involved intercepting an Intermediate-Range Ballistic Missile and was conducted in collaboration with the U.S. Missile Defense Agency, marking a significant milestone in the program.
• California was dominating the market in 2023, particularly due to its concentration of major defense contractors and aerospace companies like Northrop Grumman and Boeing. The city's proximity to key military installations and testing facilities, such as Edwards Air Force Base, further enhances its strategic importance.

USA Rocket and Missile Market Segmentation

The market is segmented into different factors like by product type, by end user and region.

By Product Type: The market is segmented by product type into ballistic missiles, cruise missiles, and hypersonic missiles. In 2023, Ballistic Missiles held a dominant market share due to their strategic importance in national defense and the continued development and modernization of Intercontinental Ballistic Missiles (ICBMs) have driven the demand in this segment. The U.S. governments focus on maintaining a credible nuclear deterrent has led to significant investments in this area, securing its dominance.

By End User: The market is segmented by end user into military, homeland security, and other government agencies. The Military segment dominated the market in 2023, due to the extensive use of missiles for defense and offensive operations, as well as the continuous modernization of the U.S. militarys missile arsenal. The Militarys ongoing procurement of advanced missile systems, particularly for air and missile defense, solidifies its position as the primary end user.

By Region: The market is regionally segmented into North, South, East, and West. The West was dominating the market in 2023, due to the high concentration of aerospace and defense contractors in California, along with significant government and military investment in the region. The proximity to major military bases and testing facilities also contributes to the Wests leading position in the market.

USA Rocket and Missile Market Competitive Landscape

• Raytheon Technologies: In April 2024, Raytheon, a division of RTX, was awarded a $344 million contract to modernize the electronics unit for two missile variants: the SM-2 Block IIICU and SM-6 Block IU. This modernization includes a new guidance section and electronics, enhancing production efficiency and reducing costs. The contract, largely funded by Foreign Military Sales, supports U.S. and allied naval defense, with initial beneficiaries including Australia, Canada, Japan, and Korea. This development strengthens Raytheon's position in the global missile defense market.
• Boeing: In December 2023, the U.S. Missile Defense Agency and a Boeing-led industry team successfully intercepted an intermediate-range ballistic missile in space during a test of the Ground-based Midcourse Defense (GMD) system.This test validated the system's Capability Increment 6B configuration, which provides missile defense operators more time, space, and flexibility to intercept threats to the U.S. homeland.

USA Rocket and Missile Market Analysis

Growth Drivers

• Increased Defense Spending: In 2024, the U.S. Department of Defense allocated approximately $842 billion for its overall defense budget, with a significant portion directed towards missile defense programs. The rising geopolitical tensions, particularly in the Indo-Pacific region, have driven the need for advanced missile systems. The government's commitment to enhancing national security through missile modernization programs. The budget is expected to continue increasing over the next five years as the U.S. aims to maintain its strategic military advantage.
• International Arms Sales and Alliances: The U.S. government approved foreign military sales worth USD 80 billion in 2024, with a significant portion involving advanced missile systems. Key buyers include NATO allies, Japan, South Korea, and Australia, who are bolstering their defenses in response to regional threats. The increase in international arms sales, supported by strong diplomatic ties and military alliances, will drive demand for U.S.-manufactured missiles, contributing to market growth over the next five years.
• Modernization of Nuclear Arsenal: The National Nuclear Security Administration (NNSA) has initiated significant efforts to modernize the U.S. nuclear arsenal, focusing on updating and enhancing intercontinental ballistic missiles (ICBMs). This modernization includes programs designed to replace aging missile systems with more advanced and reliable alternatives, ensuring the effectiveness and credibility of the nation's strategic deterrent. Continued investment in nuclear capabilities is anticipated to play a crucial role in driving growth within the rocket and missile market in the coming years.

Challenges

• Supply Chain Vulnerabilities: The U.S. missile industry heavily relies on a complex global supply chain, which has been disrupted due to geopolitical tensions and the ongoing effects of the COVID-19 pandemic. In 2024, critical components, such as advanced semiconductors and rare earth elements, faced shortages, delaying production schedules and increasing costs. Addressing these supply chain vulnerabilities is crucial, but it remains a significant challenge for the industry, impacting the timely delivery and development of missile systems.
• Regulatory and Export Control Issues: The U.S. missile industry operates under strict regulatory frameworks, including the International Traffic in Arms Regulations (ITAR). In 2024, there were several instances where export licenses for missile technology were delayed or denied due to concerns over proliferation and national security. These regulatory hurdles can limit market expansion, particularly in international sales, where compliance with export controls is essential. Navigating these regulations while pursuing global market opportunities presents an ongoing challenge for the industry.

Government Initiatives

• Missile Defense Review (MDR) Implementation: In 2024, the U.S. government began implementing the recommendations of the Missile Defense Review (MDR), which focuses on enhancing national missile defense capabilities. The MDR outlined a strategic plan for the deployment of new missile defense systems, including the Next-Generation Interceptor (NGI) and the expansion of the Aegis Ballistic Missile Defense system.
• Hypersonic Weapons Summit 2024: The Hypersonic Weapons Summit 2024 spotlights U.S. investments in hypersonic weapon development, with $4.7 billion allocated for FY2023 and additional funds for FY2024. Key programs include the Hypersonic Attack Cruise Missile (HACM), Army Long Range Hypersonic Weapon (LRHW), and Navy Conventional Prompt Strike (CPS). The summit facilitates collaboration between the Department of Defense, academia, and industry, featuring insights from military branches like the Air Force, Navy, and DARPA on national and allied hypersonic advancements.

USA Rocket and Missile Market Future Outlook

The USA Rocket and Missile Market is projected to grow exponentially by 2028, driven by continued investments in advanced missile systems, including hypersonic, anti-ballistic, and long-range precision missiles. The emphasis on modernization of the U.S. militarys arsenal and the integration of artificial intelligence (AI) in missile guidance systems are expected to be key factors shaping the future of the market. The market is also likely to see increased collaboration between defense contractors and the U.S. government to maintain technological superiority.

Market Trends

• Increased Deployment of Hypersonic Weapons: In the coming years, the U.S. is expected to significantly increase its deployment of hypersonic weapons. These systems, anticipated to become operational soon, will be integrated into various branches of the military, enhancing the U.S.'s ability to execute rapid, precision strikes against high-value targets in contested environments. The focus will be on maintaining a technological edge over adversaries through continuous development and deployment of advanced hypersonic capabilities.
• Expansion of Missile Defense Architectures: By 2028, the U.S. plans to expand its missile defense architectures, which will include integrating space-based sensors and directed energy weapons. These developments aim to counter emerging missile threats, such as hypersonic and ballistic missiles, by providing a more robust and layered defense system. The expansion will significantly enhance the U.S.'s ability to protect its homeland and allies against a wide range of missile threats.