Defence in Australia - Market Research Report (2013-2028)
Melbourne, Australia
Last Updated: August 2023
ANZSIC O7600Revenue
$51.6bn
Past 5-Year Growth
Profit
$XX.Xbn
Employees
109k
Businesses
42
Wages
$X.Xbn
Defence in Australia industry analysis
Australia's strategic environment is shifting. The government has consistently highlighted escalating geopolitical tensions in the region, necessitating increased defence spending to meet heightened security demands. This focus on security has driven the narrative of increasing defence spending in recent years. But despite these claims, defence revenue has been under pressure as high inflation reduces the real value of funding over time. The 2023 Defence Strategic Update signalled a turning point in Australia's security landscape. Australia's Defense Strategic Review (DSR), launched in 2023, marks a significant shift in the country's defence policy, with 105 of its 108 recommendations approved by the government. These changes come in response to growing regional tensions, China's rapid military buildup and a prolonged period of inadequate defence spending. Revenue is expected to climb by an annualised 2.8% over the five years through 2023-24, including a 3.9% jump in the current year, to reach $51.6 billion.
Trends and Insights
- The Federal Government is supporting defence spending. To protect Australia’s national interests, heavy investment is set to revamp air, sea and land capabilities.
- Nuclear submarines will revolutionise naval capabilities. As part of the AUKUS treaty, eight nuclear submarines will upgrade the Royal Australian Navy’s fleet.
- Most personnel are in New South Wales. The state has the most Navy and Air Force personnel, while only Queensland has more Army troops.
- The Defence industry outsources many of its functions. Equipment manufacturing, maintenance and facilities management services are outsourced to large-scale defence contractors.
Industry Overview
Market size and recent performance (2013-2028)
Industry revenue has grown at a CAGR of 2.8 % over the past five years, to reach an estimated $51.6bn in 2023.
Trends and Insights
Geopolitical tensions and inflation impact the Defence industry's performance
- The defence budget has become an urgent priority because of the AUKUS agreement and the 2023 Defence Strategic Review (DSR), recognising that Australia can't afford to delay readiness in a shifting geopolitical landscape.
- Additional trends and insights available with purchase
Source: IBISWorld
Industry outlook (2024-2029)
Market size is projected to grow over the next five years.
Trends and Insights
Increased focus on regional security will boost defence spending
- The Australian Government has pledged an additional $50.0 billion towards defence funding over the upcoming 10 years, reshuffling $72.8 billion in planned expenditure.
Biggest companies in the Defence in Australia
| Company | Market Share (%)
2024 | Revenue ($short_0)
2024 |
|---|
There are no companies that hold a large enough market share in the Defence in Australia industry for IBISWorld to include in this product.
Products & Services Segmentation
Source: IBISWorld
Industry revenue is measured across several distinct product and services lines, including Army capabilities, Air Force capabilities and Navy capabilities. Army capabilities is the largest segment of the Defence in Australia.
Trends and Insights
Army capabilities extend to domestic disasters
- The Australian Army is used for land and special operations, peacekeeping missions, and responses to terrorism and natural disasters.
- More insights available in the full report
Widen you competitive advantage with related industries
Competitors
- There are no industries to display.
Complementors
- Shipbuilding and Repair Services in Australia
- Scientific Research Services in Australia
- Investigation and Security Services in Australia
- Police and Firefighting Services in Australia
International industries
- Defence in New Zealand
Table of Contents
About this industry
Industry definition
The industry is part of Australia’s public sector. The industry largely consists of the Department of Defence, which includes various groups involved in defence and national security. These groups include the army, navy, air force, intelligence organisations, and associated administrative and support functions. The industry excludes firms that provide services to defence and educational institutions for the defence force.
What's included in this industry?
Armed forces unit operation (except manufacturing, service contractors and tertiary educational)Civil defence operation (military)Government administration (defence)Companies
Purchase this report to view all major companies in this industry.
Related Terms
COMBATPEACEKEEPINGCIVILIANAUSTRALIAN DEFENCE FORCE (ADF)Industry Code
ANZSIC 7600 - Defence in Australia
Performance
Get an indication of the industry's health through historical, current and forward-looking trends in the performance indicators that make or break businesses.
Analyst insights
The Federal Government is supporting defence spending. To protect Australia’s national interests, heavy investment is set to revamp air, sea and land capabilities.
In this chapter (4)
- Current Performance
- Outlook
- Volatility
- Life Cycle
Key metrics
- Annual Revenue, Recent Growth, Forecast, Revenue Volatility
- Number of Employees, Recent Growth, Forecast, Employees per Business, Revenue per Employee
- Number of Businesses, Recent Growth, Forecast, Employees per Business, Revenue per Business
- Total Profit, Profit Margin, Profit per Business
Charts
- Revenue, including historical (2013-2022) and forecast (2023-2028)
- Employees, including historical (2013-2022) and forecast (2023-2028)
- Businesses, including historical (2013-2022) and forecast (2023-2028)
- Profit, including historical (2013-2023)
- Industry Volatility vs. Revenue Growth
- Industry Life Cycle
Detailed analysis
- Trends in supply, demand and current events that are driving current industry performance
- Expected trends, economic factors and ongoing events that drive the industry's outlook
- Key success factors for businesses to overcome volatility
- How contribution to GDP, industry saturation, innovation, consolidation, and technology and systems influence the industry's life cycle phase.
Products and Markets
Learn about an industry's products and services, markets and trends in international trade.
Analyst insight
Nuclear submarines will revolutionise naval capabilities. As part of the AUKUS treaty, eight nuclear submarines will upgrade the Royal Australian Navy’s fleet.
In this chapter
- Products & Services
- Major Markets
Key metrics
- Largest market segment and value in 2023
- Product innovation level
Charts
- Products & services segmentation in 2023
- Major market segmentation in 2023
Detailed analysis
- Trends impacting the recent performance of the industry's various segments
- Innovations in the industry's product or service offering, specialization or delivery method
- Key factors that successful businesses consider in their offerings
- Buying segments and key trends influencing demand for industry products and services
Geographic Breakdown
Discover where business activity is most concentrated in an industry and the factors driving these trends to find opportunities and conduct regional benchmarking.
Analyst insights
Most personnel are in New South Wales. The state has the most Navy and Air Force personnel, while only Queensland has more Army troops.
In this chapter (1)
- Business Locations
Charts
- Share of revenue, establishment, wages and employment in each region
- Share of population compared to establishments in each region in 2023
Tables
- Number and share of establishments in each region in 2023
- Number and share of revenue each region accounts for in 2023
- Number and share of wages each region accounts for in 2023
- Number and share of employees in each region in 2023
Detailed analysis
- Geographic spread of the industry across Asia Pacific, and trends associated with changes in the business landscape
- Key success factors for businesses to use location to their advantage
Competitive Forces
Get data and insights on what's driving competition in an industry and the challenges industry operators and new entrants may face, with analysis built around Porter's Five Forces framework.
Analyst insights
The Defence industry outsources many of its functions. Equipment manufacturing, maintenance and facilities management services are outsourced to large-scale defence contracto...
In this chapter (4)
- Concentration
- Barriers to Entry
- Substitutes
- Buyer & Supplier Analysis
Key metrics
- Industry concentration level
- Industry competition level and trend
- Barriers to entry level and trend
- Substitutes level and trend
- Buyer power level and trend
- Supplier power level and trend
Charts
- Market share concentration among the top 4 suppliers from 2018-2023
- Supply chain including upstream supplying industries and downstream buying industries, flow chart
Detailed analysis
- Factors impacting the industry’s level of concentration, such as business distribution, new entrants, or merger and acquisition activity.
- Key success factors for businesses to manage the competitive environment of the industry.
- Challenges that potential industry entrants face such as legal, start-up costs, differentiation, labor/capital intensity and capital expenses.
- Key success factors for potential entrants to overcome barriers to entry.
- Competitive threats from potential substitutes for the industry’s own products and services.
- Key success factors for how successful businesses can compete with substitutes.
- Advantages that buyers have to keep favorable purchasing conditions.
- Advantages that suppliers have to maintain favorable selling conditions.
- Key success factors for how businesses can navigate buyer and supplier power.
Companies
Learn about the performance of the top companies in the industry.
Analyst insights
There are no major companies in the Defence industry. The Defence industry is exclusively controlled and managed by the Federal Government through the Department of Defence.
In this chapter
- Market Share Concentration
- Companies
- Company Spotlights
Charts
- Industry market share by company in 2019 through 2023
- Major companies in the industry, including market share, revenue, profit and profit margin in 2023
Detailed analysis
External Environment
Understand the demographic, economic and regulatory factors that shape how businesses in an industry perform.
Analyst insights
The Defence Act 1903 underpins regulation. The act forms the basis for regulating Australia’s Navy, Army and Air Force. The act serves to stabilise the administrative divisio...
In this chapter
- External Drivers
- Regulation & Policy
- Assistance
Key metrics
- Regulation & policy level and trend
- Assistance level and trend
Charts
- Regulation & Policy historical data and forecast (2013-2028)
- Assistance historical data and forecast (2013-2028)
Detailed analysis
- Demographic and macroeconomic factors influencing the industry, including Regulation & Policy and Assistance
- Major types of regulations, regulatory bodies, industry standards or specific regulations impacting requirements for industry operators
- Key governmental and non-governmental groups or policies that may provide some relief for industry operators.
Financial Benchmarks
View average costs for industry operators and compare financial data against an industry's financial benchmarks over time.
Analyst insights
Strong investment pushes up purchases. Massive outlays on upgrading air, land and sea capabilities are driving repair and maintenance costs. Still, strong revenue growth has ...
In this chapter
- Cost Structure
- Financial Ratios
- Key Ratios
Key metrics
- Profit margin, and how it compares to the sector-wide margin
- Average wages, and how it compares to the sector-wide average wage
- Largest cost component as a percentage of revenue
- Industry average ratios for days' receivables, industry coverage and debt-to-net-worth ratio
Charts
- Average industry operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2023
- Average sector operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2023
- Investment vs. share of economy
Data tables
- Cash Flow & Debt Service Ratios (2013-2028)
- Revenue per Employee (2013-2028)
- Revenue per Enterprise (2013-2028)
- Employees per Establishment (2013-2028)
- Employees per Enterprise (2013-2028)
- Average Wage (2013-2028)
- Wages/Revenue (2013-2028)
- Establishments per Enterprise (2013-2028)
- IVA/Revenue (2013-2028)
- Imports/Demand (2013-2028)
- Exports/Revenue (2013-2028)
Detailed analysis
- Trends in the cost component for industry operators and their impact on industry costs and profitability
Key Statistics
Industry Data
Data Tables
Including values and annual change:
- Revenue (2013-2028)
- IVA (2013-2028)
- Establishments (2013-2028)
- Enterprises (2013-2028)
- Employment (2013-2028)
- Exports (2013-2028)
- Imports (2013-2028)
- Wages (2013-2028)
Methodology
How are IBISWorld reports created?
IBISWorld has been a leading provider of trusted industry research for over 50 years to the most successful companies worldwide. With offices in Australia, the United States, the United Kingdom, Germany and China, we are proud to have local teams of analysts that conduct research, data analysis and forecasting to produce data-driven industry reports.
Our analysts start with official, verified and publicly available sources of data to build the most accurate picture of each industry. Analysts then leverage their expertise and knowledge of the local markets to synthesize trends into digestible content for IBISWorld readers. Finally, each report is reviewed by one of IBISWorld’s editors, who provide quality assurance to ensure accuracy and readability.
IBISWorld relies on human-verified data and human-written analysis to compile each standard industry report. We do not use generative AI tools to write insights, although members can choose to leverage AI-based tools within the platform to generate additional analysis formats.
What data sources do IBISWorld analysts use?
Each industry report incorporates data and research from government databases, industry-specific sources, industry contacts, and our own proprietary database of statistics and analysis to provide balanced, independent and accurate insights.
Key data sources in Australia include:
- Australian Bureau of Statistics
- Australian Taxation Office
- Australian Securities & Investments Commission
Analysts also use industry specific sources to complement catch-all sources, although their perspective may focus on a particular organization or representative body, rather than a clear overview of all industry operations. However, when balanced against other perspectives, industry-specific sources provide insights into industry trends.
These sources include:
- Industry and trade associations
- Industry federations or regulators
- Major industry players annual or quarterly filings
Finally, IBISWorld’s global data scientists maintain a proprietary database of macroeconomic and demand drivers, which our analysts use to help inform industry data and trends. They also maintain a database of statistics and analysis on thousands of industries, which has been built over our more than 50-year history and offers comprehensive insights into long-term trends.
How does IBISWorld forecast its data?
IBISWorld’s analysts and data scientists use the sources above to create forecasts for our proprietary datasets and industry statistics. Depending on the dataset, they may use regression analysis, multivariate analysis, time-series analysis or exponential smoothing techniques to project future data for the industry or driver. Additionally, analysts will leverage their local knowledge of industry operating and regulatory conditions to impart their best judgment on the forecast model.
IBISWorld prides itself on being a trusted, independent source of data, with over 50 years of experience building and maintaining rich datasets and forecasting tools. We are proud to be the keystone source of industry information for thousands of companies across the world.
Learn more about our methodology and data sourcing on the Help Center.
Frequently Asked Questions
Unlock comprehensive answers and precise data upon purchase. View purchase options.
What is the market size of the Defence industry in Australia in 2024?
The market size of the Defence industry in Australia is $51.6bn in 2024.
How many businesses are there in the Defence in Australia industry in 2023?
There are 42 businesses in the Defence industry in Australia, which has declined at a CAGR of 6.9 % between 2018 and 2023.
Has the Defence industry in Australia grown or declined over the past 5 years?
The market size of the Defence industry in Australia has been growing at a CAGR of 2.8 % between 2018 and 2023.
What is the forecast growth of the Defence industry in Australia over the next 5 years?
Over the next five years, the Defence industry in Australia is expected to grow.
What does the Defence in Australia include?
Armed forces unit operation (except manufacturing, service contractors and tertiary educational) and Civil defence operation (military) are part of the Defence industry.
How competitive is the Defence industry in Australia?
The level of competition is low and steady in the Defence industry in Australia.
