Naval Vessel MRO Market –Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Vessel Type (Submarines, Frigates, Corvettes, Aircraft Carriers, Destroyers, Other Vessel Types), By MRO Type (Engine MRO, Dry Dock MRO, Component MRO, Modification), By Region & Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 60.93 Billion
CAGR (2026-2031)	2.40%
Fastest Growing Segment	Aircraft Carriers
Largest Market	North America
Market Size (2031)	USD 70.25 Billion

Market Overview

The Global Naval Vessel MRO Market will grow from USD 60.93 Billion in 2025 to USD 70.25 Billion by 2031 at a 2.40% CAGR. The Global Naval Vessel MRO Market encompasses the comprehensive maintenance, repair, and overhaul services required to ensure the operational seaworthiness, combat readiness, and extended service life of military surface ships and submarines. The market is primarily driven by escalating geopolitical tensions that demand high fleet availability, alongside the financial imperative to modernize aging naval assets through system upgrades rather than costly new procurement. These drivers are distinct from technological trends, as they represent the fundamental operational necessities of naval forces globally.

However, a significant challenge impeding market expansion is the acute shortage of skilled shipyard labor and supply chain bottlenecks, which frequently result in maintenance delays and increased costs. Validating the surge in sector activity, according to the Aerospace, Security and Defence Industries Association of Europe, the defense industry expanded by 13.8% in 2024, reflecting the intensified demand for manufacturing and sustainment capabilities amidst the current security climate.

Key Market Drivers

Aging Naval Fleet Life Extension and Sustainment is a primary catalyst for the market, as navies increasingly opt to modernize existing vessels to bridge capability gaps caused by delays in new shipbuilding programs. This operational necessity compels defense forces to invest heavily in comprehensive overhaul projects that integrate advanced combat systems and extend the service life of older platforms to maintain deterrence capabilities. Validating this trend, according to MSD Magazine, July 2025, in the 'TKMS secures major €800 million submarine support contract' article, Thyssenkrupp Marine Systems signed a contract worth over €800 million to modernize and provide support services for the German Navy’s six Type 212A submarines over a ten-year period.

Rising Global Naval Defense Expenditures further propel the sector, with governments channeling record funds into operations and sustainment accounts to ensure fleet readiness amidst heightening maritime security threats. These escalated budgets prioritize the immediate availability of surface combatants and submarines through rigorous depot-level maintenance cycles rather than solely focusing on new acquisitions. According to Navy Times, June 2025, in the 'Navy budget seeks to boost modernization of fleet, shipyards' article, the U.S. Navy’s Fiscal Year 2026 base budget request allocated $16.2 billion specifically toward ship maintenance. Reflecting the broader market impact of this spending, according to BAE Systems, in 2025, the company's Maritime sector recorded sales of £3.2 billion in the first half of the year, representing a 12% increase on a constant currency basis.

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Key Market Challenges

The acute shortage of skilled shipyard labor and persistent supply chain bottlenecks are directly restricting the realizable revenue and capacity of the Global Naval Vessel MRO Market. Maintenance, repair, and overhaul projects are inherently labor-intensive, requiring specialized trades such as welding, marine engineering, and systems integration. When these skilled roles remain unfilled, shipyards are unable to process vessels efficiently, leading to extended dry-docking periods and forced deferrals of non-critical maintenance. This physical limitation on throughput prevents MRO providers from absorbing the full volume of demand generated by geopolitical tensions, effectively placing a hard cap on market growth regardless of the available funding or fleet requirements.

Furthermore, this resource scarcity creates a hostile cost environment that erodes sector profitability. To secure limited talent and delayed components, companies must absorb premium costs which cannot always be passed on to naval clients due to fixed-price legacy contracts. According to the Shipbuilders Council of America, in 2024, the industrial base faced a workforce deficit requiring approximately 20,000 additional skilled workers to meet scheduled shipbuilding and sustainment targets. Such a significant labor gap not only delays current project delivery but also forces the industry to divert capital toward wage inflation and recruitment rather than infrastructure expansion, thereby stifling the long-term scalability of the market.

Key Market Trends

Adoption of Digital Twin Technology for Lifecycle Management is revolutionizing the sector by enabling shipyards to create precise virtual replicas of physical assets for simulation and planning. This technological integration allows maintenance teams to predict structural failures and optimize repair schedules before a vessel even enters the dry dock, thereby minimizing operational downtime and cost overruns. By shifting from reactive measures to data-driven predictive strategies, naval forces can ensure higher readiness levels for complex platforms. Validating this investment in digital infrastructure, according to Sheet Metal Industries, January 2025, in the 'Babcock's Digital Transformation: A Next-Generation Manufacturing Hub for Naval Shipbuilding' article, Babcock invested more than £200 million in developing the infrastructure at Rosyth to modernize the site into a digital manufacturing hub.

Expansion of Public-Private Partnerships and Outsourcing Models is gaining momentum as navies increasingly rely on commercial shipyards to bridge the capacity gap left by overburdened public facilities. This strategy involves offloading non-combatant and depot-level maintenance tasks to private contractors, which helps mitigate the bottlenecks caused by skilled labor shortages in government yards. Such partnerships not only expand the available industrial base but also accelerate the turnaround times for critical modernization projects. Exemplifying this strategic shift, according to GovCon Wire, September 2025, in the 'Navy Awards Potential $1.9B Contract to 25 Companies for Submarine Maintenance, Modernization' article, the U.S. Navy selected 25 companies for a multiple-award contract worth up to $1.9 billion for repair, maintenance, and modernization work on nuclear-powered attack submarines.

Segmental Insights

The Aircraft Carriers segment is currently positioning itself as the fastest-growing category within the Global Naval Vessel MRO Market. This expansion is fundamentally driven by the extensive maintenance requirements of these capital ships, which house intricate propulsion, aviation, and electronic warfare systems. As navies seek to enhance power projection capabilities, significant investments are being directed toward the modernization and life-extension of existing fleets. Furthermore, the commissioning of new carriers by nations in the Asia-Pacific region necessitates the development of specialized support infrastructure, ensuring these assets remain combat-ready amidst evolving maritime security challenges.

Regional Insights

North America maintains a leading position in the global naval vessel MRO market due to significant investments in fleet modernization and readiness by the United States. The dominance of this region is largely attributed to the sizable defense budget allocated by the U.S. Department of Defense for the maintenance and repair of a vast naval fleet. Additionally, the presence of major shipbuilding infrastructure and long-term service contracts supports the sustained demand for overhaul activities. These factors collectively ensure that North America captures the largest share of the global market.

Recent Developments

• In November 2024, Hanwha Ocean secured a contract to provide Maintenance, Repair, and Overhaul (MRO) services for the USNS Yukon, a replenishment oiler operated by the United States Navy. This agreement marked the second time the South Korean shipbuilder won a bid for a US naval MRO project, following a similar contract for the USNS Wally Schirra earlier in the year. The vessel was scheduled to undergo regular repairs at the company’s Geoje shipyard until April 2025. This development highlighted the company’s expanding role in the global defense market and validated its capabilities following its earlier acquisition of a Master Ship Repair Agreement certification.
• In November 2024, BAE Systems received two contracts totaling $202 million from the United States Navy for the modernization and maintenance of the USS Laboon and the USS Wasp. The company's Norfolk-based ship repair unit was tasked with performing extensive hull, mechanical, and engineering repairs on the guided-missile destroyer and the amphibious assault ship. The scope of work included dry-docking the vessels for underwater hull maintenance, preserving internal tanks, and upgrading crew living spaces. These projects were expected to begin in early 2025 and included options that could increase the total value of the awards.
• In April 2024, Cochin Shipyard Limited signed a Master Shipyard Repair Agreement (MSRA) with the United States Navy, qualifying the Indian firm to repair US naval vessels. This non-financial agreement allowed the shipyard to bid for and execute maintenance contracts for ships under the Military Sealift Command. The deal underscored the strengthening maritime defense cooperation between India and the United States and positioned the company as a key regional hub for naval sustainment. The facility had previously completed repairs for a US naval ship, demonstrating its capability to meet the stringent technical standards required for such critical operations.
• In March 2024, Babcock International was awarded a contract valued at approximately $709.9 million by the United Kingdom Ministry of Defence for the life extension of the HMS Victorious. This agreement tasked the company with delivering deep maintenance and modernization services for the Vanguard-class nuclear-powered submarine at its Devonport facility. The program was designed to ensure the vessel remained operationally capable until the next generation of submarines entered service. The project involved a comprehensive overhaul of the submarine’s systems and structure, supporting more than 1,000 jobs in the local region and sustaining critical sovereign naval capabilities.

Key Market Players

• General Dynamics Corporation
• Huntington Ingalls Industries Inc.
• Lockheed Martin Corporation
• Navantia S.A. SM.E
• ThyssenKrupp AG
• BAE Systems PLC
• Naval Group
• Rolls-Royce PLC
• Rhoads Industries Inc.
• EDGE PJSC Group

By Vessel Type	By MRO Type	By Region
Submarines Frigates Corvettes Aircraft Carriers Destroyers Other Vessel Types	Engine MRO Dry Dock MRO Component MRO Modification	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

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

• Naval Vessel MRO Market, By Vessel Type:

• Submarines
• Frigates
• Corvettes
• Aircraft Carriers
• Destroyers
• Other Vessel Types

• Naval Vessel MRO Market, By MRO Type:

• Engine MRO
• Dry Dock MRO
• Component MRO
• Modification

• Naval Vessel MRO 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