US defence budget predicted to continue its growth

By 2023, the US defence expenditure is expected to grow to approximately $742 Billion while growing at a rate of 1.98% during the forecast period. As a percentage of GDP, the US defence expenditure is expected to be approximately 3.1% during the same period.

The country will look to spend most of its budget in efforts to retain its military supremacy and replace outdated and worn-out weapons used in the Iraq and Afghanistan wars. US expenditures could also increase due to the ongoing political tensions in the Middle East. While the United States holds the largest budget for defence technology, it is also the largest exporter of defence equipment in the world. The U. is also expected to continue to remain the largest importers due to increased defence budgets in allied countries such as Saudi Arabia, UAE, Turkey, India, South Korea, Singapore, the UK and Japan.

According to Credit Suisse, the aerospace and defence sector is poised for stronger revenues as revenue trends outweigh cost headwinds. Margins are projected to expand for the first time since 2015, driven by robust demand and sales. The larger-than-expected revenue is attributable to US President Donald Trump's stance on increasing military defence spending.

Trump's position led the Department of Defense spending to grow by 9% in 2018 from the year prior, Blackrock said in a blog post.

"The 2019 National Defense Authorization Act was passed at its swiftest pace in 20 years, up to $717 Billion (a 12% increase from 2017). Even after the 13% quarter-to-date decline in the Dow Jones US Aerospace & Defense Index, the industry group is still up 46% since 2016 Election Day," Blackrock said.

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