Germany defence spending boom to create growth market for SMEs - HCOB
About €73 billion of Germany's planned €108 billion defence outlays for 2026 are expected to flow directly to small and medium-sized companies, a study from Hamburg Commercial Bank (HCOB) showed. The volume of spending benefiting companies will increase 36% to €72.6 billion in 2026, outpacing a 25% rise in the overall defence budget. Total defence spending will reach €183.7 billion by 2030, with around €140 billion benefiting companies.
72 billion) of the €108 billion outlays planned for 2026 expected to flow directly to businesses, a study from Hamburg Commercial Bank (HCOB) showed on Tuesday. 6 billion in 2026, outpacing a 25% rise in the overall defence budget. 7 billion by 2030, with around €140 billion, or 77% of the budget, benefiting companies. "For mid-sized companies with specialised expertise or dual-use technologies, the defence sector may open up new business opportunities," said Cyrus de la Rubia, author of the study.
Large defence contractors pass on as much as 80% of their order volumes to suppliers, creating opportunities for smaller firms. However, capacity constraints could limit expansion. Shortages of skilled workers, specialised steel and semiconductors, as well as lengthy qualification and certification procedures, are among the hurdles. The defence industry can preserve industrial expertise, jobs and technological capabilities, but will not on its own resolve Germany's broader economic weakness, the study concluded.
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