Australia Defense Market Report and Forecast 2025-2034

According to this report, the Australia defense market size reached around USD 50.0 billion in 2024. Aided by a growing emphasis on national security, increasing geopolitical tensions in the Indo-Pacific region, and substantial investments in modernising defense infrastructure, the market is projected to grow at a CAGR of 5% between 2025 and 2034, reaching almost USD 81.5 billion by 2034.

The Australia defense market growth is shaped by a combination of domestic policies, global security concerns, and technological advancements in defense capabilities. The country's commitment to strengthening its military capabilities is driven by the evolving security landscape in the Indo-Pacific, with the rising influence of China, the increasing threats of terrorism, and the need for enhanced cyber defense capabilities.

One of the key drivers aiding the Australia defense market expansion is the government’s defense spending, which has been on an upward trajectory. The Australian government has committed to increasing its defense budget significantly over the coming years, with a substantial portion of this investment directed towards modernising the country’s defense infrastructure.

As per the Australia defense market analysis, the Australian Army is also undergoing modernisation, with a focus on upgrading its land-based capabilities to address emerging threats. This includes investments in advanced armoured vehicles, precision-guided artillery, and networked communications systems that will enhance the army's operational effectiveness. Additionally, Australia is enhancing its special operations and cyber defense capabilities to address the evolving nature of warfare, where non-traditional threats, such as cyberattacks and asymmetric warfare, are becoming increasingly prominent.

The growing importance of cybersecurity in the defense landscape is shaping the Australia defense market landscape. As the world becomes more interconnected, the threat of cyber warfare has risen dramatically, with state and non-state actors increasingly engaging in cyberattacks to target critical infrastructure, steal sensitive information, and disrupt military operations. In response, Australia has made substantial investments in strengthening its cyber defense capabilities.

The Australian Cyber Security Centre (ACSC) plays a central role in this effort, working to safeguard government agencies, private sector entities, and critical national infrastructure from cyber threats. As part of its broader defense strategy, Australia is focused on developing its cyber capabilities to not only protect its own infrastructure but also contribute to regional and global cyber defense efforts.

The Australia defense market is also guided by the need to maintain a strong presence in the Indo-Pacific region. The country has long been a staunch supporter of regional security initiatives and multilateral defense partnerships, particularly through organisations such as the Association of Southeast Asian Nations (ASEAN) and the Quad (comprising Australia, India, Japan, and the United States). These alliances enable Australia to engage in joint military exercises, share intelligence, and coordinate defense strategies to counter regional security challenges. Australia’s strategic location and its ability to collaborate with regional partners make it a critical player in maintaining stability in the Indo-Pacific.

The Australia defense market has been evolving rapidly, with an increasing focus on domestic defense manufacturing capabilities. The government’s defense procurement plans include a significant emphasis on sourcing defense equipment locally, which aims to bolster Australia’s industrial capacity and create jobs within the country. The Australian defense industry is expected to play a central role in the development, production, and maintenance of defense equipment, particularly in sectors such as aerospace, naval shipbuilding, and land vehicle manufacturing. This push to localise defense production is designed to not only enhance national security but also stimulate economic growth and innovation in the defense sector.

The Australia defense market development is also linked to the rise of advanced technologies, such as artificial intelligence (AI), autonomous systems, and space capabilities. Australia is exploring the integration of these technologies into its defense infrastructure to maintain a technological edge over potential adversaries. AI-driven systems, such as autonomous drones and intelligent surveillance tools, are becoming increasingly important in military operations, as they enable more efficient and precise decision-making. Moreover, Australia’s interest in expanding its space capabilities has led to greater investment in space-based defense systems, which will enhance its ability to monitor global security developments and protect its own space assets.

The Australia defense market dynamics is also being shaped by changing geopolitical dynamics, particularly the growing assertiveness of China in the Indo-Pacific. Australia’s defense strategy is evolving in response to China’s military expansion, particularly its naval presence in the South China Sea. In response, Australia is working to strengthen its regional defense partnerships and enhance its own military capabilities to ensure it can effectively contribute to the maintenance of regional security. This geopolitical shift is driving significant investments in defense technologies that will enable Australia to adapt to an increasingly complex and competitive security environment.

In conclusion, the Australia defense market is poised for steady growth in the coming years, underpinned by strong government investment in defense capabilities, a focus on modernisation, and the integration of advanced technologies. As Australia continues to navigate an evolving security landscape, both domestically and internationally, its defense market will remain a critical area of focus, with substantial investments aimed at ensuring the nation’s preparedness and resilience. With a growing emphasis on self-reliance, regional partnerships, and technological innovation, the market is positioned to strengthen its strategic role in the Indo-Pacific region and beyond.

Market Segmentation

The market can be divided based on type, operation, application, platform, and region.

Market Breakup by Type

• Defense Equipment Maintenance, Repair and Overhauling Services
• Defense Support and Auxiliary Equipment
• Weapons and Ammunition
• Artillery and Mortar Systems
• Infantry Weapons
• Missile and Missile Defense Systems
• Ammunitions
• Vehicles
• Land-based Vehicles
• Sea-based Vehicles
• Air-based Vehicles
• Communication Systems
• Personnel Training, Simulation, and Protection Equipment
• Others

Market Breakup by Operation

• Manual
• Autonomous Defense Equipment
• Others

Market Breakup by Platform

• Land
• Airborne
• Army
• Navy
• Air Force

Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Australian Capital Territory
• Western Australia
• Others

Competitive Landscape

The report looks into the market shares, plant turnarounds, capacities, investments, and mergers and acquisitions, among other major developments, of the leading companies operating in the Australia defense market. Some of the major players explored in the report are as follows:

• ASC Pty Ltd.
• Austal Limited
• Australian Missile Corporation
• Boeing Aerostructures Australia Pty Ltd.
• Aerotec Qld Pty Ltd.
• Stralis Aircraft Pty Ltd.
• Airspeed Pty Ltd.
• Thales Australia Limited
• Others