Defence sector revenues rise in 2024; industry urges EU to tackle structural challenges

Brussels – The European defence industry is growing, and it could not be otherwise. The continuing Russian-Ukrainian war, new NATO commitments, and geopolitical tensions are driving demand, orders, and investments. In 2024, defence industry turnover reached EUR 183.4 billion, an increase of 22.3 billion euros compared to 2023 (+13.8 percent), with increases in all three main sectors: aeronautics (74.9 billion euros, +13.6 percent), naval (43.2 billion euros, +13.6 percent), and land (65.3 billion euros, +14.3 percent). This is the state of the industry according to figures updated by ASD Europe, the producers’ association, of which Saab, Leonardo, and Rolls-Royce, among others, are members. 

“The numbers confirm a strong momentum” for the industry, emphasises Micael Johannson, president of ASD and managing director of Saab. Not all that glitters is gold, however. The industry welcomes the European Commission’s initiatives, such as the 2030 strategy, but they need to be implemented as soon as possible. “The increased defence budget and European collaborative initiatives are a step in the right direction, but we need to accelerate their implementation,” emphasises Johannson, calling for a broader change of pace.

The annual report accompanying the industrial turnover figures contains analyses, evaluations, and considerations. ASD still sees two significant problems for the industry. On the one hand, “shortages of critical raw materials and electronic components” persist. On the other hand, “a significant part of European procurement continues to be supplied by non-European suppliers.” The European defence industry is thus still heavily dependent on China and the United States.

Hence, the call to “solve these structural challenges,” which will allow “fully leveraging the industry’s capabilities, allowing it to provide solutions that ensure the delivery of essential defence capabilities.” It means first and foremost, as emphasised in the report, ” procurement budgets are predominantly invested in Europe’s own defence industrial base,” which is “still not the case, undermining the European defence industry’s competitiveness.” For Johannson, this always translates into the same imperative: act, and act fast. “In this unpredictable and shifting geopolitical and technological landscape, Europe must act strategically, balanced, and with speed.” In addition, it must invest more in Europe, among Europeans, and beyond. 

There is also a need to rebalance the business environment with the transatlantic partner. “There is a kind of contradiction when we talk about dependence on the United States,” notes the ASD president. “Of course, we need competition, but we also need reciprocity: the European market is more open. There are differences between establishing industry in Europe and establishing industry in the United States.”

From left: Camille Grand, ASD Secretary General, and Micael Johannson, President of ASD [Brussels, December 2, 2025. Photo: Emanuele Bonini]

At the level of political-industrial strategy, there is also the need to work together despite everything. “Whatever happens in Ukraine, there are no scenarios in which European security will be magically resolved,” emphasises Camille Grand, Secretary General of ASD Europe, who is convinced that “the 2030 outlook makes sense from an industrial point of view.”

“We all want peace and for Ukraine to remain a sovereign country. However, even with peace, as an industry, we want to continue to build security,” Johannson added. Focusing on defense means investing in the EU’s competitiveness, and the president of ASD reminds us of this when he stresses that “there is still a long way to go in implementing the Draghi report,” as has already been highlighted in other areas.

Varying perceptions of reality likely influence the tasks ahead. “I have the impression that in certain countries – such as the Baltics, Poland, and Germany – there is a sense of urgency, while in other countries there is no such sense of urgency.”