Defence expenditure in the US will equal that of the rest of the world combined
within 12 months, making it "increasingly pressing" for European contractors
to develop a "closer association" with the US, corporate finance group
PricewaterhouseCoopers (PwC) says.
Its report - 'The Defence Industry in the 21st Century' by PwC's global aerospace
and defence leader Richard Hooke - adds that "the US is in the driving
seat", raising the prospect of a future scenario in which it could "dominate
the supply of the world's arms completely".
The US defence budget reached US$417.4 billion in 2003 - 46 per cent of the
Less than two per cent of the US defence budget is spent outside its home market,
the report notes, and of this around one per cent goes to UK contractors.
Hooke says: "The message for management teams in all this - apart from
the obvious for US contractors to monopolise the industry - is that they will
fail to maximise value if they fail to define accurately the business segment
in which they operate.
"For Europe and the UK in particular, it means, right now, an increasingly
pressing need to develop a closer association with the US market."