Institution: The European defense industry will see positive demand, but may face supply challenges

Analysts at Vertical Research Partners stated after this week’s Eurosatory defense exhibition in Paris that while the demand outlook for the European defense industry appears positive, supply is a different matter. Analysts Robert Stallard and Karl Oehlschlaeger wrote in a research report that the industry will face fiscal pressure, but defense spending across the European continent is showing a clear upward trajectory, which could be a multi-year trend. They wrote: “For defense companies, the bigger issue may not be demand—but supply.” They noted that the larger issue may not be budgets, but rather capacity, staffing, tooling, rare earths, and contract processes within defense ministries. Not every company can achieve the same level of execution.