Italian and Spanish Defence Sectors to Reap the Benefits of Rising Military Spending

This commentary examines the impact of increased military spending on the major players in the Italian and Spanish defence industries.

Key highlights include:
-- Although European governments will continue to import weapons, increased military spending across the continent will benefit domestic suppliers.
-- Italy will likely increase investments in defence, and companies like Leonardo and Fincantieri are poised to profit.
-- Spain is also expected to invest more in defence; more than 80% of revenue from Spanish companies in the defence sector, such as Navantia and Indra, are generated in the local market.

"We expect that European countries will seek to largely buy from national suppliers when it comes to bulking up their defence spending targets", said Edoardo Danieli, Vice President, European Corporate Ratings, Diversified Industries & Energy. "Companies in countries that have a larger defence spending potential are better positioned to benefit from these trends."