LONDON (AP) --Arms manufacturers will have to seek new markets as the economic crisis and changing priorities curb military spending in the U.S. and Europe, analyst Jane's Information Group said Tuesday.
The U.S. accounts for nearly half the world's defense spending, but Jane's predicts U.S. expenditure will fall in the next few years, while military spending in Europe will remain flat.
The publication Jane's Industry Quarterly identified Australia, South Korea, Saudi Arabia, Taiwan and Brazil as the most attractive "golden markets" for defense companies. Jane's chose those markets for a combination of growth rate, market size, stability and openness to international defense companies.
Editor Guy Anderson said military spending in parts of Asia, the Middle East, South America and Oceania was rising because of "growing prosperity combined with an increasingly volatile local or regional security environment."
"Economic turmoil, changing priorities and rising costs are having a severe impact on defense budgets across Europe and the U.S., and this is leading defense companies to need to look to new frontiers to maintain growth," Anderson said.
Jane's predicts the U.S. defense budget will fall by US$75.9 billion to US$620 billion by 2010. Military spending in the 27 EU states is expected to rise 2 percent to US$297 billion.
After the U.S., the world's biggest spenders on defense are Britain, France, China and Japan.