Future of the Netherlands’ Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2018

Friday 3 May 2013, Amsterdam

The Netherlands is one of the top 20 defense markets across the world, with a defense budget allocation of US$10.1 billion in 2013. Share of capital expenditure out of Netherlands’s total defense budget decreased from 27.0% in 2009 to 26.2% in 2013, and is expected to average at 26.4% over the forecast period (2014-18). Primarily driven by military modernization programs, and coast guard and internal security the country’s defense expenditure is expected to register a CAGR of -0.31% during the forecast period. This decrease in spending is expected to be primarily due to the European debt crisis, which will force the Netherlands to cut its defense budget over the forecast period.


 

The Netherlands’ defense imports recovered in 2012 after falling in 2010 and 2011, and are expected to increase slightly in the forecast period due to the procurement of F-35 aircraft, NH90 helicopters, missile upgrades for F-16s, and upgrades for armored vehicles and infantry fighting vehicles. Historically, US defense companies have been the main arms suppliers to the Netherlands; Sweden and Romania started supplying to the Netherlands in 2011 and 2012. Missiles, armored vehicles, sensors, and artillery accounted for the majority of defense imports.

The country’s defense exports, which recovered in 2011 after falling in 2010, are expected to remain at 2009 levels during the entire forecast period. The country started exporting to new destinations outside Europe such as Colombia, the US, and Saudi Arabia in 2011 and 2012 as its traditional European client countries have made cuts to their defense expenditure. The Netherlands mainly exports defense hardware such as ships, sensors, and armored vehicles