German Machinery Firms See Strong Defence Sector Growth

Optimistic outlook, but some problems remain German Machinery Makers Expect Strong Growth in Defence Sector

2026-11-07 From Detlev Karg 1 min Reading Time

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A VDMA survey highlights significant growth potential and available production capacity, but regulatory hurdles and procurement procedures remain obstacles.

Hartmut Rauen, Deputy Executive Director of VDMA, sees considerable opportunities for German machinery manufacturers in Europe's expanding defence market.(Photo: VDMA) — Hartmut Rauen, Deputy Executive Director of VDMA, sees considerable opportunities for German machinery manufacturers in Europe's expanding defence market.
(Photo: VDMA)

Germany's mechanical and plant engineering industry expects significant growth in the European defence market. According to a new survey by industry association VDMA, 43% of companies already supplying the security and defence sector expect to at least double their revenues in this market by 2030. A further 46% anticipate moderate growth. The survey, involving more than 330 VDMA member companies, also points to increasing momentum in the near term. Some 29% of active suppliers expect defence-related revenues to grow by at least 15% in 2026, rising to 35% of respondents forecasting similar growth in 2027. Manufacturing and production technologies represent the industry's main contribution to European defence capabilities, cited by 61% of respondents. Other areas include drones and counter-drone systems, sensors, electronics, advanced materials and digital technologies. "Our industry offers cutting-edge technologies that are now finding increasingly open and rapidly growing markets in the defence sector. We expect to gain substantial market share," said Hartmut Rauen, Deputy Executive Director of VDMA.

Capacity available, market access remains difficult

Despite the positive outlook, defence remains a relatively small market for most machinery manufacturers, generally accounting for no more than 10% of total revenues. However, 92% of companies already active in the sector believe they could increase deliveries within the next twelve months. The main obstacles are lengthy procurement procedures, regulatory requirements, limited customer contacts and insufficient knowledge of defence procurement structures. Nevertheless, 29% of companies not yet active in the sector are considering entering the market. VDMA sees considerable potential for its members to support Europe's expanding defence industry, particularly by supplying manufacturing equipment, components and technologies needed to increase production capacity.

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