Defence Industrial Outlook 2026

Executive summary

Europe is spending on rearmament at treaty level. It cannot yet manufacture what the money buys. The Outlook is a public-source intelligence assessment of the industrial system behind Europe’s 155 mm ammunition rebuild - and its findings are uncomfortable, quantified, and directly relevant to anyone deciding where the next wave of capacity gets built.

The bottleneck has moved. Shell-body and assembly capacity is scaling fast - Europe’s largest new plant went from ground-break to opening in 15 months. The constraint is now high-explosive fill, propellant, and the loading, assembly and packing capacity that turns components into certified rounds. A warehouse of inert bodies is not firepower.

The TNT window is real and dated. Europe’s dominant TNT producer has committed 18,000 tonnes to the US market across 2027-2029 - exactly the years allied intelligence services identify as the period in which Russia could reconstitute the capability to threaten NATO.

The finding survives any stockpile assumption. We derive Europe’s requirement three independent ways. Even the most conservative floor - roughly 30 million rounds - absorbs about 18 years of Europe’s generously-estimated RDX output.

Demand survives a ceasefire. The structural deficits - energetics and LAP - persist under treaty-anchored NATO capability targets and contracted replenishment. The downside case is modelled, not waved away.