The year is 2013 and in both the United States and Europe, governments are drastically lowering their defense budgets. This trend is expected to continue for the next 10-15 years, so that countries can slowly reduce the mountains of debt they’ve amassed. Unfortunately, it will likely hurt many industries, including those in the connector and cable assembly business.
In the past, defense applications have created many uses for cable assemblies. In 2012, over $1.7 billion was spent worldwide (the United States was responsible for 41% of that number, China came in second with 8.2%). But as defense spending declines, so does the military’s budget for cable assemblies and military connectors. In the United States, we’re looking at a reduction of $85 billion (or 12%) per year. The military is expected to create fewer naval vessels (aircraft carriers, especially), fewer replacement tanks, and fewer replacement munitions. The government is slowly decreasing spending for the war in Afghanistan, and as the war winds down, so will the budget for military repairs and replacement equipment. Due to Europe’s financial and political instability, European countries are also not expected to spend very much on their military and aerospace industries in the years to come. This great reduction in spending is bound to have a big effect on the cable assembly industry.
Some of the few military and aerospace cable assembly manufacturers expected to remain in good shape are those serving China and other Asian Pacific countries. In that part of the world, at least, defense spending should increase. China will undoubtedly be the fastest growing region in terms of military growth and spending.
Military cable assemblies and connectors are known to be rugged, reliable, and regulated, following strict specifications and complex requirements. Although defense budgets are down and cable assembly manufacturers are predicting weak sales, governments will likely always need militaries, so once the economy improves in the United States and Europe, sales will surely return to their former heights.