Guided Munitions Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Product Type (Tactical Missile, Guided Rockets, Guided Ammunition, Loitering Munition), By Technology Type (Infrared, Semi-Active Lasers, Navigation System, Anti-Radiation, Others), By Launch Platform Type (Land, Airborne, Naval), By Region & Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 37.75 Billion
CAGR (2026-2031)	5.51%
Fastest Growing Segment	Tactical Missile
Largest Market	North America
Market Size (2031)	USD 52.08 Billion

Market Overview

The Global Guided Munitions Market will grow from USD 37.75 Billion in 2025 to USD 52.08 Billion by 2031 at a 5.51% CAGR. Guided munitions are precision-engineered weapon systems that utilize internal or external guidance mechanisms, such as Global Positioning Systems (GPS), laser designators, or inertial navigation, to strike targets with high accuracy while minimizing collateral damage. The primary drivers supporting market growth include the urgent necessity for nations to replenish depleting stockpiles due to ongoing geopolitical instability and a strategic shift toward precision capabilities suitable for asymmetric urban warfare. According to the AeroSpace and Defence Industries Association of Europe (ASD), in 2025, the European defense sector recorded a turnover increase of 13.8% to €183.4 billion for the previous year, reflecting the intense industrial mobilization required to meet these escalated procurement demands.

Despite this positive trajectory, the market faces a significant challenge regarding supply chain fragility, particularly in the sourcing of energetic materials and advanced microelectronics required for guidance units. These component shortages create production bottlenecks that limit the ability of the industrial base to rapidly scale output, resulting in extended delivery timelines and increased unit costs for procuring defense agencies.

Key Market Drivers

The urgent requirement for munition stockpile replenishment constitutes a primary driver for the market, necessitated by the rapid expenditure of precision assets in ongoing high-intensity conflicts. Nations are aggressively mobilizing their industrial bases to backfill depleted inventories of guided rockets, missiles, and artillery shells which have been consumed at rates exceeding peacetime production capacities. This demand signal has resulted in historic order volumes for major defense contractors as governments prioritize immediate readiness and inventory sustainability. For instance, according to RTX, October 2024, in the 'Q3 2024 Earnings Release', the company reported a record backlog of $221 billion, a figure significantly bolstered by the unprecedented international demand for advanced missile defense systems and guided interceptors. This trend underscores the direct correlation between geopolitical instability and the accelerated procurement cycles for kinetic solutions.

Concurrently, the surge in global defense budgets and military modernization programs is providing the necessary fiscal framework to sustain these elevated procurement activities. Governments are not only replacing expended rounds but are also upgrading their arsenals with next-generation precision-guided weapons to ensure technological overmatch. This financial commitment allows for the integration of enhanced guidance packages into legacy platforms and the acquisition of long-range standoff capabilities. According to NATO, June 2024, in the 'Defence Expenditure of NATO Countries (2014-2024)' report, defense spending by European Allies and Canada increased by 17.9 percent in real terms for the year, marking the largest annual rise in decades. This expanded fiscal capacity translates directly into manufacturing contracts for guided systems. According to the U.S. Department of Defense, in 2024, the Javelin Joint Venture was awarded a modification contract worth $1.3 billion for the procurement of Javelin missiles and associated equipment.

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Key Market Challenges

Supply chain fragility regarding the sourcing of energetic materials and advanced microelectronics represents a critical barrier to growth in the Global Guided Munitions Market. These specialized components are essential for the propulsion and precision guidance systems that define modern weaponry, yet they rely on a highly concentrated and vulnerable sub-tier supplier base. When manufacturers face shortages of these inputs, production lines inevitably stall, creating severe bottlenecks that prevent the industry from converting record-high order backlogs into realized revenue. This logistical restriction physically caps market expansion, as the industrial base cannot rapidly scale output to match the surge in geopolitical demand.

The severity of these limitations is evident in recent industrial data. According to the National Defense Industrial Association, in 2024, 38% of private sector respondents identified capacity constraints as a primary vulnerability within the defense supply chain. Such constraints directly result in extended delivery timelines and escalated unit costs, effectively reducing the purchasing power of defense budgets. Consequently, the market's growth trajectory is dampened not by a lack of orders, but by the inability of the manufacturing ecosystem to secure the necessary materials to fulfill them efficiently.

Key Market Trends

The rapid proliferation of loitering munition capabilities is fundamentally reshaping tactical engagement strategies by offering a cost-effective bridge between surveillance drones and traditional guided missiles. Unlike the broader market driver of stockpile replenishment, this trend focuses on equipping small units with organic, expendable precision-strike assets that can identify and neutralize high-value targets in real-time. The shift toward these "suicide drones" allows armed forces to conduct asymmetric warfare with high lethality and minimal logistical footprints. This surge in demand for single-use, autonomous systems is clearly reflected in the recent financial performance of key industry players. According to AeroVironment, June 2025, in the 'Fiscal 2025 Fourth Quarter and Fiscal Year Results', revenue for the company’s Loitering Munitions Systems segment increased by 87% year-over-year, underscoring the aggressive integration of these weapons into modern force structures.

Simultaneously, the development of hypersonic guided projectiles has emerged as a critical technological priority designed to penetrate sophisticated anti-access/area-denial (A2/AD) environments. Defense agencies are channeling substantial investment into weapons capable of speeds exceeding Mach 5, seeking to ensure strike success against adversaries with advanced interception capabilities that render subsonic cruise missiles less effective. This strategic imperative is distinct from upgrading legacy platforms, as it requires entirely new propulsion and thermal management technologies to achieve kinetic energy lethality. The scale of this high-end innovation is evident in major development awards. According to Defence Industry Europe, June 2025, in the 'Lockheed Martin secures $1 billion contract to advance U.S. hypersonic weapon system' article, the U.S. Department of Defense awarded a contract modification worth up to $1 billion to Lockheed Martin to further develop the Conventional Prompt Strike hypersonic program.

Segmental Insights

Based on recent market research, the Tactical Missile segment is identified as the fastest-growing category within the Global Guided Munitions Market. This rapid expansion is primarily driven by escalating geopolitical instability and the increasing requirement for precise, long-range engagement capabilities in modern combat zones. Defense agencies globally are prioritizing the modernization of their arsenals, focusing on missile systems that ensure operational accuracy while minimizing collateral damage. Furthermore, the integration of advanced navigation technologies accelerates the procurement of these munitions, positioning the Tactical Missile segment at the forefront of industry growth.

Regional Insights

North America maintains a commanding position in the Global Guided Munitions Market, driven primarily by the extensive defense budgets and modernization initiatives of the United States. The U.S. Department of Defense actively prioritizes the procurement of precision-strike capabilities to enhance operational effectiveness while minimizing collateral damage, a key requirement in modern engagement strategies. This region benefits from a robust industrial base, hosting major manufacturers that develop essential guidance technologies, including Global Positioning Systems and inertial navigation. Furthermore, the increasing integration of these munitions with unmanned aerial vehicles solidifies the region's status as the primary hub for defense technology development.

Recent Developments

• In December 2025, the U.S. Navy awarded BAE Systems a five-year indefinite delivery, indefinite quantity contract with a ceiling of $1.7 billion for the production of Advanced Precision Kill Weapon System (APKWS) laser-guidance kits. The agreement included an initial order worth $322 million to meet the growing requirements of U.S. forces and international allies. These guidance sections transform unguided 2.75-inch rockets into precision-guided munitions, offering a cost-effective solution for engaging stationary and moving targets with minimal collateral damage. The contract ensures high-volume production to support global inventory needs and sustain operational readiness for the armed services.
• In August 2025, the NATO Support and Procurement Agency executed a multinational framework agreement with RTX for the supply of Paveway laser guidance kits. This strategic contract facilitates the acquisition of these precision systems by alliance member nations to modernize their air-to-ground tactical capabilities. The guidance kits are designed to convert standard gravity bombs into precision-guided munitions, improving targeting accuracy while substantially reducing the required ordnance inventory for mission success. This consolidated procurement approach aims to streamline logistics, ensure rapid delivery of critical defense technologies, and bolster the interoperability of allied air defense forces across the region.
• In October 2024, Northrop Grumman unveiled the Jackal, a new turbojet-powered precision strike missile designed to address gaps in short-range and loitering munition capabilities. This next-generation weapon system features a range exceeding 100 kilometers and is equipped with advanced autonomous waypoint navigation to operate effectively in GPS-denied environments. Capable of high speeds and extended loitering for target identification, the missile offers multi-domain flexibility for launch from air, land, and maritime platforms. The product launch highlights the company's strategic focus on developing versatile, stand-off munitions that enhance tactical dominance in highly contested operational areas.
• In June 2024, the U.S. Army approved the full-rate production of the Extended-Range Guided Multiple Launch Rocket System (ER GMLRS) by Lockheed Martin. The company received a fiscal 2024 contract modification valued at $200 million to manufacture these advanced munitions, which significantly increase the operational range compared to standard variants. This production milestone followed successful operational testing at the White Sands Missile Range, where the rockets demonstrated precise flight trajectories and target engagement capabilities. The systems are manufactured at the company's Center of Excellence in Camden, Arkansas, supporting the service's long-range precision fire modernization efforts and inventory replenishment.

Key Market Players

• Lockheed Martin Corporation
• RTX Corporation
• Northrop Grumman Corporation
• BAE Systems plc
• General Dynamics Corporation
• Thales S.A.
• Rheinmetall AG
• Kongsberg Gruppen ASA
• Leonardo S.p.A.
• Saab AB

By Product Type	By Technology Type	By Launch Platform Type	By Region
Tactical Missile Guided Rockets Guided Ammunition Loitering Munition	Infrared Semi-Active Lasers Navigation System Anti-Radiation Others	Land Airborne Naval	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Guided Munitions Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Guided Munitions Market, By Product Type:

• Tactical Missile
• Guided Rockets
• Guided Ammunition
• Loitering Munition

• Guided Munitions Market, By Technology Type:

• Infrared
• Semi-Active Lasers
• Navigation System
• Anti-Radiation
• Others

• Guided Munitions Market, By Launch Platform Type:

• Land
• Airborne
• Naval

• Guided Munitions Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE