2021 Small Caliber Ammunition Market New Growth Opportunities with 7.5% of CAGR by 2028 1
The Insight Partners
According to the new research report titled “Small Caliber Ammunition Market Forecast to 2028 – COVID-19 Impact and Global Analysis,” published by The Insight Partners, the market is expected to reach US$ 10,241.57 million by 2028 at a CAGR of 7.5% from 2021 to 2028.

Ammunition plays a decisive role in escalating, prolonging, or intensifying armed conflict. It is consumable and continuously replenished. The ammunition is used primarily with small arms as well as with some light weapons. Small caliber ammunition is majorly used by military/armed forces, homeland security departments, and government agencies worldwide; such a large base of customers leads to an increasingly high demand for them. Surging terrorist activities across the world as well as increasing internal and international conflicts are compelling government agencies and military authorities, and police departments to procure this type of ammunition. Furthermore, military modernization initiatives being implemented in major defense countries are gathering greater focus on spending significant amounts on the procurement of ammunition, which is supporting the market growth.

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Further, advancements in ammunition sizes are also significantly contributing to the small caliber ammunition market growth. For instance, the development of .300 Blackout (BLK) bullet has compelled the army professionals to prefer .300 Blackout for special operation missions as it offers more stopping power. In line with its plans to shift to the 6.8mm caliber, the US army has launched the Next Generation Squad Weapon program to develop prototypes. However, the demand for small caliber ammunition size of 5.56 mm still continues, particularly, due to its superior aeroballistics performance, and consequent better accuracy, over long ranges. In collaboration with companies such as Heckler & Koch GmbH, France and Germany, among others, are introducing new rifles that are chambered for 5.56mm, and these products are likely be in service for another 20–25 years. In developing countries, continuous efforts are being made to upgrade and modernize existing small caliber ammunition production facilities.

According to a survey by SIPRI, the COVID-19 pandemic has had no effect on the ammunition demand from the defence sector in the US. The US Department of Defense (DoD) has requested manufacturers to proceed with ammunition-related product operations. However, the demand for ammunition in civil and commercial applications has declined, especially in sporting and hunting activities. The need for self-defense ammunition has risen significantly.  As a result, the above-mentioned variables should have a neutral impact on the small caliber ammunition market in the region.

Military modernization is influencing the ammo industry in countries such as Germany, France, India, China, and Russia, which are investing heavily in improving their land forces’ capabilities by inducting state-of-the-art small arms. For example, in January 2019, the Norwegian Defence Materiel Agency awarded a contract to German defence manufacturer Heckler & Koch for the delivery of HK416 A5 assault rifles. The HK416 A5 is an improved version of the combat-proven HK416 assault rifle, which fires NATO 5.56 x 45 mm ammunition.  Such factors drive the growth of the small caliber ammunition market across the world.

Increased federal expenditure on military modernization programmes to purchase better arms to replace the current arsenal is one of the key driving factors for the growth of the global small caliber ammunition market. Threats from insurgency, territorial disputes, and regional tensions have compelled countries to increase military spending. According to the Stockholm International Peace Research Institute (SIPRI), gross global military spending increased by 2.6% and reached to US$ 1,981 billion in 2020. This is the highest annual budget increase since 2010. Increasing defence budgets have made it easier to spend more in military modernization efforts aimed at acquiring better arms to complement or replace the current arsenal.

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