Future of the Austrian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018 - a new market research report on companiesandmarkets.com
PR-Inside.com: 2014-04-22 01:25:01
Austria is projected to spend US$13.3 billion on its armed forces during the forecast period. Defense expenditure registered a CAGR of -1.33% during the review period, primarily due to the European debt crisis which led to a slowdown of the economic activities in emerging markets, including Austria. Expenditure to be driven by peacekeeping missions and the acquisition of advanced defense systems.
The Austrian economy has begun to recover from the 2008 recession; however the pace of recovery is, expected to be slow. To counter the mounting deficit and increasing public debt, the government is cutting back on its expenditure, including that on defense. This is expected to adversely affect military procurement expenditure over the next five years, and the domestic industry, which is mostly dependent on government procurement, will be severely affected. The focus sectors as per the 2013 federal budget are education, universities, research and development (R&D), and infrastructure to boost the growth and employment rate.
The recession, combined with decreasing threat levels from external sources, has made the Austrian government refocus its defense procurement strategy. In December 2010, it announced a massive sell-off plan of its heavy equipment armory and, according to the country´s Defense Ministry; this is a direct consequence of the peace efforts propagated by the EU region bordering Austria. The government declared that the Austrian forces will sell off two thirds of its heavy equipment fleet, including various types of tanks, 20mm and 35mm anti-aircraft guns, Mistral anti-aircraft missiles, Panzerabwehrlenkwaffe 2000 anti-tank missiles, and mortars by 2014.
Many international defence equipment manufacturers enter the Austrian market through acquisitions or alliances. The country is open to such market entry options and encourages investment in the defence sector. The international space equipment supplier, RUAG Space, entered the Austrian market through the acquisition of Austrian Aerospace from Saab Holdings in November 2008.
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