EIA forecasts defense, NASA program opportunities
Arlington, VA — Suppliers to U.S. and European defense and space programs take note: the electronics portion of the U.S. defense budget is projected to grow 7 percent over the next 10 years, despite a decline in the overall Department of Defense (DOD) budget. NASA`s program budgets will be stable through the remainder of the decade, but European defense budgets will continue to contract.
These and other findings are part of the Electronic Industries Alliance`s (EIA) 34th Annual 10-Year Forecast of Defense and NASA Electronics Market Opportunities for 1999 through 2008. EIA`s Government Electronics and Information Technology Association (GEIA) sector conducted the research.
The U.S. defense forecast is “good news in relative terms,” says Mark Rosenker, EIA`s vice president of public affairs. “As the budget itself is declining, the electronics portion of that budget seems to be demonstrating some growth. If you are an electronics manufacturer or supplier, there is some reason to be optimistic.”
GEIA found that the electronics content in the DOD`s research; development, test and evaluation; procurement; and operations and maintenance accounts will grow from a fiscal year 1999 baseline of $57.6 billion to $61.7 billion in fiscal year 2008. Electronics content for procurement has the greatest growth from $19.8 billion to $22 billion during the same period.
Overall, GEIA forecasts stability in DOD funding, with an increase in annual funding levels, but with fewer procurements of platforms and other major systems. Upgrades, systems integration, command and control, and other electronic components will account for an increasing share of defense expenditures.
GEIA also found that NASA`s budget has stabilized and will remain at $13.5 billion for the rest of the decade. NASA is moving to privatize most agency operations so that it can concentrate on pursuing science and technology objectives, according to the forecast. New program opportunities will develop with the start of the Origins program to find other planetary systems.
In Europe, GEIA predicts an increasingly competitive market for defense electronics in the coming years. Defense budgets will continue to contract, which will create more pressures for downsizing and consolidation in the European defense industry. Multinational teaming and other forms of partnering with European companies will be key to U.S. companies doing business in the region, the study found.