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Overview


the visibility of gun control talks, making potential legisla- tion a greater possibility. In December 2012, the Obama administration announced its intention to reform gun laws to prevent a similar tragedy from happening again. Conse- quently, consumers have started purchasing firearms and ammunition at record rates. Te number of FBI National Instant Criminal Background Checks (NICS) is currently at an all-time high, which is indicative of mounting con- sumer interest in gun ownership. Between 2007 and 2012 the number of background checks rose at an annualized rate of 11.9%, and during the first three months of 2013, the num-


to 2013, imports were expected to grow at an annualized rate of 9.3% to $3.9 billion. Te industry gets a large portion of its firearm imports from Austria and Italy, due to the popularity of the Glock and Beretta brands, respectively. However, Ger- many and the United Kingdom are the most popular sources of imports of ammunition and ordnance products.


Future Challenges Te Guns and Ammunition Manufacturing industry’s tra-


jectory during the five years to 2018 will largely depend on the United States’ involvement in foreign conflicts and consumer perception regarding the future of firearms legisla- tion. While revenue was estimated to surge dur- ing the five years to 2013, it is forecast to move more in line with histori- cal growth rates during the next five years, increasing at an annual- ized rate of 4.5% to $18.4 billion by 2018. Te effects of the


($ Billions)


Budget Control Act of 2011 will further lower government spend- ing domestically and abroad, which will continue to dampen downstream demand in


ber of background checks skyrocketed 44.5% compared with the same period in 2012. Because consumers generate about 60% of industry revenue, the demand they generate is critical to the industry’s success.


Trading Bullets Exports generate about 35.2% of the Guns and Ammuni-


tion Manufacturing industry’s revenue. Although government demand for industry products was expected to subside in the five years to 2013 due to budget cuts, exports grew at an aver- age annual rate of 9.8% during the period because of mount- ing global demand. Tis robust growth is forecast to continue during the five years to 2018, allowing the United States to remain a net exporter of guns and ammunition. Tis antici- pated growth will provide relief, which will counter receding government demand. Domestic consumers, on the other hand, have increasingly


turned to imports to satisfy their rapidly growing demand for guns and ammunition. With demand for industry products surging during the past five years, domestic manufacturers have struggled to keep up. Consequently, during the five years


34 Aerospace & Defense Manufacturing 2013


coming years. Federal, state and local law enforcement agen- cies are also projected to cut back on spending as stimulus funding dries up and budgetary constraints return. Military spending abroad is forecast to decline in the five-year period as well. On the other hand, the threat of terrorism will likely persist for years to come, resulting in continued funding of federal, state and local law enforcement to expand terrorism prevention and response capabilities. Aſter record growth in civilian small arms and ammunition


sales during the past few years, demand is expected to moder- ate in coming years. As the economy continues to recover, fears regarding increased crime and concerns about changes to gun laws will begin to subside, causing this segment’s uncharacteris- tically fast growth rate to slow to a more reasonable rate. Never- theless, the civilian market will slowly continue to drive sales in light of reduced government spending in this industry.


Tanks and Armored Vehicle Manufacturers Since 2002, demand for the Tank and Armored Vehicle


Manufacturing industry has been volatile. Between 2002 and 2009, the wars in Iraq and Afghanistan supported strong


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