AMMUNITION MARKET ANALYSIS

Ammunition Market Size and Trends

The global ammunition market is estimated to be valued at US$ 31,104.9 Mn in 2024 and is expected to reach US$ 38,220.9 Mn by 2031, exhibiting a compound annual growth rate (CAGR) of 3% from 2024 to 2031.

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The global ammunition market has witnessed a rise over the past decade due to increasing defense expenditures of countries and growing internal security threats. Law enforcement agencies and national militaries across both developed and developing nations have boosted their ammunition stocking to deal with issues like terrorism, border conflicts, and political instability. Additionally, the popularity of recreational shooting and hunting has expanded the consumer segment of this industry. Innovations in ammunition design have allowed manufacturers to develop more effective and high-performance bullets. However, strict regulations on ammunition trade and sales to civilian users in some parts of the world may moderately challenge market growth going forward.

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Insights By Type: Superior firepower drives demand for large caliber ammunitions

In terms of type, large caliber ammunitions segment is estimated to hold the highest share of the market of 33.3% in 2024 owing to its vital role in modern warfare. These munitions are used in various artillery systems and provide long-range and highly destructive fire support against targets. Their ability to deliver heavy payloads over extended distances makes them a preferred choice for military forces seeking strategic dominance on the battlefield.

Insights By Product: Widespread small arms usage drives small arm ammunition market share

In terms of product, small arm ammunition segment is estimated to hold the highest share of the market of 35.4% in 2024 owing to its ubiquitous role across the military and commercial sectors. These munitions are used extensively by infantry forces worldwide in weapons like rifles, pistols, sub-machine guns, and combat shotguns. Their affordability and versatility make them a default choice for frontline troop weaponry.

Insights By Application: Strategic defense spending drives defense sector ammunition demand

In terms of application, defense segment is estimated to hold the highest share of the market of 38.6% in 2024owing to continuous geopolitical conflicts and territorial disputes worldwide. Military forces remain the largest end-user of all types of ammunition due to strategic operational needs. Most national defense budgets allot highest funding for ammunition stockpiling.

Escalating India-Pakistan tensions, South China Sea conflicts and renewed Sino-American rivalry fuel ammunition procurement. With threats of war ever-present, defense agencies prioritize maintaining ample strategic reserves. Meanwhile recent tensions in East Europe and Middle East have seen arsenal replenishment across the said regions. Unpredictable crises thus drive governments to expand ammunition manufacturing/import capacity.

Regional Insights

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Regional Analysis: Global Ammunition Market

Dominating Region: North America

North America is expected to account for the greatest revenue share, with 32.4% in 2024 In North America, the dominance in the ammunition market can be attributed to the presence of leading global players like Vista Outdoor and Olin Corporation. The region's advance defense capabilities further boost demand. With pro-gun laws and large shooting community, countries like the U.S. provide a fertile ground for market growth.

Fastest-Growing Region: Asia Pacific

the Asia Pacific region exhibits the fastest growth, driven by increasing defense spending of major economies like China and India. Growing geopolitical risks and modernization of armed forces is prompting governments to strengthen their ammunition stockpiles. Rapid economic development in Southeast Asian nations has also fueled the demand for sporting ammunition.

Ammunition Market Outlook for Key Countries

US: The U.S. market continues to be leading global force underpinned by Second Amendment rights and new product innovations from key suppliers. Companies such as Remington Outdoor are enhancing their product lines to leverage opportunities.

China: China's market is expanding rapidly in line with the country's assertive defense policies. Domestic player, Norinco, is investing heavily to localize production and supply military programs.

India: Indian continues to lead ammunition procurement in South Asia supported by large-scale defense modernization drives. Companies like OFB and Solar are stepping up activities to fulfill requirements of security forces.

Germany: Germany's market is fueled by demand from law enforcement and export opportunities in Europe. Major players like Rheinmetall and Ruagare leveraging their engineering capabilities.

Market Concentration and Competitive Landscape

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Market Driver - Rising defense budget of multiple countries

With rising geopolitical tensions and security threats across various regions, many countries are significantly ramping up their defense spending in recent years. The focus on modernizing armed forces with latest weapons and platforms has led to growing demand for ammunition. The U.S., for instance, has witnessed steady growth in its defense budget over the past decade due to lengthy military campaigns in West Asia and renewed strategic competition with China and Russia. It is expected to remain one of the largest ammunition importers globally to sustain ammunition stockpiles of its army units. For instance, according to data from the Stockholm International Peace Research Institute (SIPRI), world military expenditure reached an all-time high of $2.1 trillion in 2021.

Market Challenge - Stringent government regulations on ammunition sale and export

The global ammunition market is facing stringent challenges due to increasing government regulations across various countries on sale and export of ammunition. Many countries have now enacted strict laws requiring extensive background checks and restrictions on bulk purchases of ammunition. Additionally, the export of ammunition has also become challenging with new rules and compliance requirements imposed by regulatory bodies. According to data from the United Nations Office on Drugs and Crime, the global seizures of ammunition shipments doubled from 2020 to 2021 reflecting increased trade monitoring by governments.

Market Opportunity - Development of less lethal and non-lethal ammunition for market

The global ammunition market has a huge untapped opportunity in the development of less lethal and non-lethal ammunition. With growing emphasis on safety and restraint, military and law enforcement agencies are showing interest in adopting alternative ammunition that can temporarily incapacitate a target without risk of serious injury or death. Leading manufacturers can gain a competitive edge by investing in R&D to create innovative ammunition like rubber bullets, tear gas shells, acoustic hailing devices, etc. catering to this niche segment. For instance, the UN reports that arms export licences were denied to Eastern European countries by Western nations in 2021 due to human rights concerns. 

Ammunition Industry News

• In January 2024, Nammo AS was given USD 95 million by the government of Norway as an investment to increase its production. The money is going to be used mainly on its 155 mm artillery ammunition.
• In December 2023, Rheinmetall concluded a new order for several tens of thousands of shells of various types for the Ukrainian armed forces. Delivery is scheduled for 2025. The order value is USD 1.3 billion.
• In November 2023, the UK Ministry of Defense, or MOD finalized a contract with BAE Systems for procuring additional small arms munitions to the tune of USD 21 million. As part of the contract awarded by the MOD to BAE Systems, the latter is expected to deliver further small arms munitions over the next two years.
• In November 2023, the government of Germany ordered about 100,000 rounds of 120 mm mortar ammunition from Rheinmetall for Ukraine. With a price tag in the lower-three-digit million-euro range, the purchase is part of a military aid bundle the U.S. supplied to the armed forces in Ukraine worth approximately USD 433 million. Delivery will start in the coming months and stretch over the next two years.

Key Takeaways from Analyst

• The global ammunition market is poised to grow steadily over the next decade driven by increasing defense budgets of major economies and rising investments in military modernization programs. The demand for ammunition is especially projected to rise from countries in North America and Asia Pacific seeking to strengthen their national security. Ongoing geopolitical tensions and territorial conflicts across various regions will also continue spurring demand.
• However, stringent government regulations regarding the sale and use of ammunition in many Western nations may somewhat impede market growth. Moreover, rising concerns about public safety due to increased incidents of gun violence and stricter background checks for firearms ownership in some countries may negatively impact the commercial ammunition segment.

Market Report Scope

Market Dynamics

Market Driver - Rising defense budget of multiple countries

With rising geopolitical tensions and security threats across various regions, many countries are significantly ramping up their defense spending in recent years. The focus on modernizing armed forces with latest weapons and platforms has led to growing demand for ammunition. The U.S., for instance, has witnessed steady growth in its defense budget over the past decade due to lengthy military campaigns in West Asia and renewed strategic competition with China and Russia. It is expected to remain one of the largest ammunition importers globally to sustain ammunition stockpiles of its army units. For instance, according to data from the Stockholm International Peace Research Institute (SIPRI), world military expenditure reached an all-time high of $2.1 trillion in 2021.

Market Challenge - Stringent government regulations on ammunition sale and export

The global ammunition market is facing stringent challenges due to increasing government regulations across various countries on sale and export of ammunition. Many countries have now enacted strict laws requiring extensive background checks and restrictions on bulk purchases of ammunition. Additionally, the export of ammunition has also become challenging with new rules and compliance requirements imposed by regulatory bodies. According to data from the United Nations Office on Drugs and Crime, the global seizures of ammunition shipments doubled from 2020 to 2021 reflecting increased trade monitoring by governments.

Market Opportunity - Development of less lethal and non-lethal ammunition for market

The global ammunition market has a huge untapped opportunity in the development of less lethal and non-lethal ammunition. With growing emphasis on safety and restraint, military and law enforcement agencies are showing interest in adopting alternative ammunition that can temporarily incapacitate a target without risk of serious injury or death. Leading manufacturers can gain a competitive edge by investing in R&D to create innovative ammunition like rubber bullets, tear gas shells, acoustic hailing devices, etc. catering to this niche segment. For instance, the UN reports that arms export licences were denied to Eastern European countries by Western nations in 2021 due to human rights concerns. 

Market Segmentation

•  Type Insights (Revenue, USD, 2019 - 2031)
• • Large caliber ammunitions
  • Medium caliber ammunitions
  • Small caliber ammunitions
  • Artillery ammunitions
  • Mortar ammunitions
  • Naval ammunitions
  • Aircraft ammunitions
•  Product Insights (Revenue, USD, 2019 - 2031)
• • Small arm ammunition
  • Rockets
  • Torpedoes
  • Missiles and warheads
  • Bombs (grenade and rocket bombs)
  • Miscellaneous (mines and other explosives)
•  Application Insights (Revenue, USD, 2019 - 2031)
• • Defense
  • Homeland Security
  • Others (Personal, R&D, entertainment, and fire services)
• Regional Insights (Revenue, USD, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Key Players Insights
  • Poongsan Corporation
  • Alliant Techsystem, Inc.
  • MaxamCorp Holding
  • Olin Corporation
  • Nammo AS
  • CBC Group
  • BAE Systems
  • Rosoboronexport