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Global space budgets hit ceiling: Euroconsult

Paris, France: Euroconsult, an international research and analysis firm specialised in the space sector, announced that global budgets for space programmes reached a ceiling of USD 70 billion. It also confirmed slowdown in expansion experienced by the space industry in the last 10 years. 
According to Euroconsult’s new report, Profiles of Government Space Programs: Analysis of 60 Countries & Agencies, world government expenditures for space programmes will decline in the coming years as a larger number of governments will likely reduce their investments into space activities. 
The report stated that space programmes received a short term boost in recent years from several governments to counter the economic crisis. However, they must now undergo even more stringent budget constraints exemplified by the European public debt crisis and the US Budget Control Act of 2011. In addition, the decrease of global funding for space programmes is also the consequence of the inherently cyclical nature of public investment in certain space applications and programmes, particularly when related to the procurement of operational systems. New leading and emerging space programmes in Asia, Latin America and Middle East/Africa will represent the first budget growth driver confirming a changing environment for the global space sector.
The report forecasted that the space expenditures should recover growth in the second half of the decade with the stabilisation of public finances and the launch of new procurement / R&D for next generation defence and civil programmes.
“As we anticipated in previous editions of our report, growth expenditures experienced in the past decades could not be maintained in the long term due to cycles of investments and the lasting effect of the economic crisis now impacting public finances globally,”  said Steve Bochinger, President of Euroconsult North America. ”This situation forces government and industry players to revise their strategy and give greater priority to international cooperation in order to share risks and costs.  In the mid-term, budgets for space programmes should recover with the normalisation of public finances and the necessity to procure next generation space systems, but governments will likely impose more conditions on long-term objectives associated with their investments.”
Government space expenditures reached nearly USD 40 billion for civil programmes. The upcoming three to five years shall be characterised by continued budget pressure in leading countries, including US, Europe, Japan and Canada, along with the need to define a coherent long term strategy for their space programmes; more reasonable growth of expenditures in Russia; continuous expansion in new leading countries (China and India); and continuous dynamic programmes in emerging countries.  
Funding for defence space programmes reached USD 30 billion in 2011 and should experience a pronounced decrease in funding by 2015 before recovering in the second half of the decade. This will be largely influenced by the cycles of procurement from military agencies and in particular, the completion of most programmes currently under development in the US. As a point of comparison, between 1989 and 1995, the DoD experienced the same cyclical downturn with a 40% cut in budget. Cuts should be less drastic this time but should still significantly impact US industry that has relied heavily on the domestic military market during the last decade.
53 countries invested USD 10 million or more in space applications and technologies, compared to 42 in 2006; there were 26 in 2001. The development of global space programmes in an increasing number of countries has been an obvious trend during the past decade as space has become a worthwhile investment for governments willing to acquire independent assets to help their  social, economic, and technological development, while at the same time contributing to their national defence and security programmes. – The US invested USD 43 billion in its space programme (civil and defence) in 2011, experiencing the first decline in spending since the mid 1990s. The US space program accounts for 61% of global space budgets, a record low pulled down by the recent decrease in funding, the emergence of new regional leaders and more generally  by  the multiplication of countries investing in space technologies. Despite this trend, the US remains an unchallenged leader both in dollar value and in relation to its GDP.- Eight countries/organisations invested over USD 1 billion: Russia, Japan, France, China, Germany, India, the European Union and Italy; there were five in 2006 (Russia, Japan, France, Germany and China). – 19 countries or agencies recorded over USD 100 million: Canada, Brazil, Argentina, Mexico, Belgium, Norway, Spain, Sweden, Switzerland, The Netherlands, The United Kingdom, Kazakhstan, Iran, Israel, Turkey, The UAE, Pakistan, Australia, South Korea; 12 of them were part of that list in 2006. – Five other countries invested between USD 10 million and USD 100 million in their national space programmes; 20 of them were part of that list in 2006.
Throughout 2011, strong funding trends for specific applications became more pronounced. Civil and defence non-classified world expenditure trends included:- Human spaceflight: USD 10.9 billion (18 percent of global budget), -6 percent over 2010- Earth observation & meteorology: USD 9 billion (15 percent of global budget), +16 percent over 2010- Satellite Communications (SatCom): $8.4 billion, (14 percent of global budget), -10 percent over 2010- Science and exploration: USD 6 billion (10 percent of global budget), -7 percent over 2010- Access to space: USD 5.8 billion (10 percent of global budget), +37 percent over 2010- SatNav: USD 3.2 billion (5 percent of global budget), +5 percent over 2010- Space security: USD 2.4 billion (4 percent of global budget), +26 percent over 2010
Source: Euroconsult