Market Trends of North America Small Arms Industry
Military Segment Expected to Continue its Dominance During the Forecast Period
- North American countries, specifically the United States and Canada, accounted for 94% of the total military spending in the region, followed by South America with 5.1% and Central America and the Caribbean with 1.2%. In 2021, the United States spent approximately 800.67 billion U.S. dollars on its military, while Canada's defense budget for the same year was around 26.5 billion U.S. dollars, representing a three billion U.S. dollar increase compared to 2020.
- With the increase in military engagements, armed forces are upgrading to more powerful small arms to meet combat requirements. Additionally, militaries are prioritizing firearms that can cause cyclical impacts and inflict more damage on enemies as their armor becomes tougher to penetrate. Countries are now procuring a wide variety of the latest-generation small arms for their militaries.
- For instance, in April 2022, the Army awarded SIG Sauer, a manufacturer, a contract for two new soldier weapons: the XM5 rifle and the XM250 automatic rifle. The XM5 will replace the M4/M4A1 carbine rifle for soldiers involved in close-quarters combat, while the XM250 will replace the M249 squad automatic weapon. Such procurements are expected to drive the segment's growth during the forecast period.
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The United States to Exhibit the Highest Growth Rate During the Forecast Period
- On April 4, 2022, the FY2023 presidential budget request for the United States totaled USD 773 billion, with USD 177.5 billion allocated for the Army, USD 194 billion for the Air Force and Space Force, and USD 230.8 billion for the Navy and Marine Corps. This represents a 4.1% increase from the FY2022 request.
- The high defense spending of the United States has allowed for the procurement of new-generation small arms. In addition, the adoption of next-generation weaponry by political rivals like Russia and China has incentivized the United States to invest heavily in enhancing the capabilities of its armed forces. US personnel are frequently deployed for peacekeeping missions, as military attachés, or as part of embassy or consulate security, among other classified missions. These deployments have significantly contributed to the growth of small arms procurement by the US armed forces.
- The US forces use various infantry weapons designed to suppress enemy positions, facilitate movement for friendly troops, attack distant targets, and neutralize fortified structures and vehicles. The United States is currently focused on procuring the next-generation squad weapon for its infantry.
- After nearly five years of development, the Army is expected to finalize the design for its Next Generation Squad Weapon by mid-2022 to replace the M4 carbine and M249 machine guns currently used by ground combat soldiers. The two weapons resulting from the Next Generation Squad Weapon program will be fielded to soldiers in frontline military occupational specialties, including infantry, cavalry scouts, combat medics, forward observers, combat engineers, and special operations forces.
- Furthermore, the United States has a significant number of civilian gun users, contributing to the development of a robust small arms industry over the years. As a result, demand from both the civilian and military sectors is expected to continue to positively influence the market in the region during the forecast period.
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