The submarine market will be valued at $22.8 billion this year. By 2026 the market will reach $36.3 billion, according to Strategic Defence Intelligence. This represents a compound annual growth rate of (CAGR) of 4.74%.
Spending will increase $2.8 billion this year, and is forecasted to reach $3.3 billion in 2026. This represents a CAGR of 1.7%.
Factors such as the replacement of aging submarines, using marine vehicles for surveillance and border disputes are contributing to the spending increase.
The largest markets are North America, Asia-Pacific and Europe
Britain's ministry of defense announced a contract with defense firm BAE Systems to build four new submarines.
The project will cost $1.7 billion.
Parliament approved upgrading the nation's nuclear weapons system in July. As the UK prepares to leave the European Union
, an upgraded military is seen as key to defense.
"Britain's ballistic missile submarines are the ultimate guarantee of our nation's safety – we use them every day to deter the most extreme threats," Defense Secretary Michael Fallon told the media. "We cannot know what new dangers we might face in the 2030s, 2040s and 2050s so we are acting now to replace them."
The new Successor submarines will have a 30-year lifespan.
The UK has a current fleet of four Vanguard submarines. The four submarines have alternating positions: One is deployed, one undergoes maintenance and two are used for training maneuvers or are in port. They were build in 1992 with a 25-year service life.
The submarines are used as a nuclear deterrent, the British government said.
The nation will increase spending to 2% of its gross domestic product. The budget will be spent on armored vehicles, airplanes and ships. The new submarines will enter service in the 2030s. They will carry Trident missiles. Construction will begin this week.