May 21, 2019   SOURCE: BusinessWire

Insights Into the Portuguese Defense Market 2019-2024 - International Peacekeeping Operations Expected to Drive Defense Expenditure - ResearchAndMarkets.com

The "Future of the Portuguese Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024" report has been added to ResearchAndMarkets.com's offering.

This report offers detailed analysis of the Portuguese defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.

Select Report Findings

  • Portugal's military expenditure, which stands at US$2.46 billion in 2019, is anticipated to grow from US$2.53 billion in 2020 to value US$2.74 billion in 2024, registering a CAGR of 2.03%, over the forecast period.
  • The growth will primarily be fueled by the government plans to completely withdraw austerity reforms over the forecast period, which is expected to boost the country's economy.

The Portuguese defense budget is anticipated to value US$2.7 billion by 2024, growing at a CAGR of 2.03%. Portugal's military expenditure, which stands at US$2.46 billion in 2019, is anticipated to grow from US$2.53 billion in 2020 to value US$2.74 billion in 2024, registering a CAGR of 2.03%, over the forecast period. The growth will primarily be fueled by the government plans to completely withdraw austerity reforms over the forecast period, which is expected to boost the country's economy.

Military expenditure, on a cumulative basis, is anticipated to be US$13.1 billion over the forecast period, which is higher than the US$11.3 billion spent during the historic period. Portugal is an active participant in joint operations with the European Union (EU) and peacekeeping operations with NATO and the United Nations (UN), and as such, seeks higher spending in terms of its defense sector. This, along with the Military Programming Law (LPM) that the country is anticipated to undertake over the next coming years, is expected to drive Portugal's defense expenditure over the forecast period.

Over the forecast period, the country's capital expenditure allocation is expected to average 18.6%, and revenue expenditure is expected to cap at an average of 81.4%. Capital expenditure over the forecast period is expected to increase at a CAGR of 2.04%, from US$471.1 million in 2020 to US$510.7 million in 2024. This is owing to the significant uptick in weapon procurement plans, as well as procuring defense equipment to replace outdated ones. For instance, Portugal is procuring 6 Agusta Westland AW119 Koala helicopters, 6 Viana do Castelo OPVs and one multi-role vessel, 47 4x4 Tactical Communications Vehicles, apart from procuring the country is also modernization its Black Shark Heavyweight Torpedoes, Tridente Class Attack Submarines.

The Portuguese homeland security expenditure valued US$2.5 billion in 2020 and is expected to grow at a CAGR of 2.54% to reach US$2.8 billion in 2024, over the forecast period. This expenditure is primarily driven by Portugal's focus on enhancing its defense capabilities to counter the increasing rate of cyber-attacks and securing the country's maritime borders. The HLS budget is anticipated to be invested in the procurement of tablets, PDAs, offshore patrol vessels, biometric systems, and other advanced technology systems to strengthen its internal security forces.

In particular, the report provides an in-depth analysis of the following:

  • The defense industry market size and drivers: detailed analysis of the Portuguese defense industry during 2020-2024, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country's expenditure and modernization patterns
  • Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country
  • Porter's Five Force analysis of the Portuguese defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitution, intensity of rivalry, and barriers to entry
  • Import and Export Dynamics: analysis of prevalent trends in the country's imports and exports over the last five years
  • Market opportunities: details of the top five defense investment opportunities
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the Portuguese defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis

Defense Market Size Historical and Forecast

  • Portuguese defense budget is expected to record a CAGR of 2.03% over the forecast period
  • International peacekeeping operations expected to drive defense expenditure over the forecast period
  • Portuguese defense expenditure as a percentage of GDP is expected to decline over the forecast period

Analysis of Defense Budget Allocation

  • Capital expenditure is expected to account for 18.6% of the defense budget over 2020-2024
  • Capital expenditure is anticipated to record a CAGR of 2.04% over the forecast period
  • Army is expected to receive the highest allocation over the forecast period
  • Army is anticipated to have the major share of expenditure over the forecast period
  • Per capita defense expenditure is projected to increase over the forecast period

Homeland Security Market Size and Forecast

  • Portuguese homeland security budget anticipated to record a CAGR of 2.54% over the forecast period
  • Cyber-attacks and maritime security set to drive homeland security expenditure over the forecast period

Benchmarking with Key Global Markets

  • Portuguese defense budget expected to remain low compared to the leading spenders
  • Portuguese defense expenditure to remain low compared to major spenders in Europe
  • Portugal allocates lower share of GDP to defense compared to the US and other European countries

Opportunities: Key Trends and Growth Stimulators

  • Top 10 Defense Market Categories by Value (US$ million) - Forecast-Period Projections
  • Corvettes MRO
  • Physical Security
  • Land-based C4ISR

Import Market Dynamics

  • Defense imports are expected to increase over 2020-2024
  • Portugal sourced the majority of its arms imports from Denmark
  • Naval vessels and armored vehicles accounted for the majority of military imports

Export Market Dynamics

  • Defense exports expected to rise during the forecast period
  • Romania accounted for the majority of Portuguese defense exports
  • Aircraft are the main exported defense products

Market Entry Strategy

  • Market Regulation
  • Offset policy aids development of domestic defense industry and research activities

Market Entry Route

  • Budgeting Process
  • Procurement Policy and Process
  • Setting up subsidiaries offers a market entry opportunity
  • Technology transfer, sub-contracts, and long-term supply contracts open new market entry strategy choices

Key Challenges

  • Preference for EU companies poses a challenge for other companies
  • Budget cuts due to austerity measures challenging defense companies
  • Domestic defense companies facing challenges from foreign companies
  • Corrupt practices in the Portuguese government challenges the industry

Companies Mentioned

  • OGMA - IndstriaAeronutica de Portugal S.A.
  • EID - Empresa de Investigao e Desenvolvimento de Electrnica S.A.
  • Edisoft
  • EMPORDEF TI Inc.
  • IndraSistemas Portugal
  • Leonardo - Societ per azioni
  • Arsenal Alfeite
  • Fabrequipa
  • Critical Software

For more information about this report visit https://www.researchandmarkets.com/r/uhcr2s