Forecast International Expects UAV Market to Rise Strongly through the Next Decade; Unmanned Land- & Sea-Based Systems' Values also Growing

The wars in Iraq and Afghanistan sent unmanned aerial vehicle production to record heights, but with the last U.S. military troops in Afghanistan slated to depart the country this year, the Pentagon's demand for unmanned air vehicles is slackening. However, while fewer UAVs are expected to roll off the production lines from 2014 to 2023, market intelligence provider Forecast International believes that manufacturers can still expect their coffers to grow, based on the new systems' relatively higher price tags.

Based on its Platinum Forecast System 2.0®, Forecast International expects production of about 1,000 UAVs of all types in 2014, with output rising to nearly 1,100 units in each of the following two years. Thereafter, production is forecast to average about 960 UAVs annually for the remaining seven years of the 2014-2023 forecast period.
While UAV production is expected to remain relatively stable over the next 10 years, the value of production will steadily climb, from about $942 million in 2014 to $2.3 billion in 2023. China manufacturer AVIC is expected to account for the lion's share ($5.76 billion) of the 10-year market value, based on production of hundreds of pricey UAVs, nearly all earmarked for Chinese consumption.

Northrop Grumman, builder of the U.S. Air Force's expensive RQ-4B Global Hawk and the U.S. Navy's MQ-4C Triton, is next in line with forecast production worth $2.58 billion. The U.S. Department of Defense is expected to maintain its reliance on UAVs of all types.

In an apparent about-face, the Air Force recently decided not to retire the Global Hawk, but will instead put the venerable U-2 high-altitude reconnaissance plane out to pasture. Air Force Secretary Deborah Lee James said sustainment costs for the Global Hawk have dropped in recent years, prompting the decision to retire the U-2s. Pentagon plans also call for gradually phasing out the General Atomics MQ-1 Predators and shifting to an all-MQ-9 Reaper fleet. The Reaper is also built by General Atomics.

Interest in UAVs is also growing overseas. The U.K. Ministry of Defence Select Committee recently concluded that UAVs "contributed greatly to the effectiveness of military operations in Iraq and Afghanistan."

Current events are also accelerating interest in UAVs in other countries. In the shadow of Russia's annexation of Crimea, Poland's Air Force plans to expand its fleet of UAVs. "Poland wants UAVs capable of carrying out reconnaissance and surveillance missions, as well as strikes on ground targets," said Larry Dickerson, Forecast International's senior unmanned vehicles analyst. "Warsaw will make a decision on purchasing new unmanned aircraft before the end of 2014, but an announcement could come much sooner." Meanwhile, South Korea is moving ahead with plans to acquire Global Hawk Block 30 UAVs, which will greatly improve the country's military surveillance capabilities.

Platinum 2.0 data also reveal that the value of land- and sea-based unmanned systems will rise toward the latter part of the 10-year period. Land-based systems include bomb disposal robots and remotely operated ground vehicles conducting reconnaissance in hazardous areas. Sea-based vehicle applications range from mine detection and disposal to use as torpedo decoys.

All told, some 41,800 land- and sea-based unmanned systems worth about $10.5 billion are forecast for production during the 2014-2023 forecast period. Of this amount, the value of future production for those systems for which a manufacturer has not yet been assigned - "Future Opportunity" - is nearly $1.3 billion.