BERLIN (Reuters) - Rising military spending across Europe is opening new growth opportunities for German machinery manufacturers supplying the defense industry, according to a survey by the machinery association VDMA.
The survey of more than 330 member companies found that 43% of firms already active in security and defense expect revenue from those businesses to at least double by 2030, while another 46% anticipate modest growth.
Nearly one in three companies operating in the sector expect revenue growth of at least 15% this year, with momentum projected to strengthen in 2027.
Next year, 35% expect growth of at least 15%, while another 39% forecast increases of between 5% and 15%.
Despite those prospects, security and defense remain a relatively small business for most participating companies active in the sector, accounting for no more than 10% of total revenue for the majority.
Machinery manufacturers contribute to European defense capabilities through production equipment, components, sensors, electronics, drone technologies and software.
Some 61% of respondents identified potential applications for their manufacturing and production technologies in the sector.
VDMA said 92% of companies already active in defense could increase deliveries within the next 12 months.
Andreas Evertz, chairman of VDMA’s Security and Defense Industry Forum and chief executive of Flender Group, said machinery manufacturers provide the equipment, components and expertise needed to expand defense production.
He said the survey demonstrated the industry’s readiness to take responsibility and expand capacity flexibly.
Companies nevertheless identified weak customer contacts, lengthy procurement procedures and demanding regulations as obstacles to expansion.