Executive Summary . 5
SWOT Analysis 6
US Security SWOT 6
US Political SWOT . 7
US Economic SWOT 8
US Business Environment SWOT 8
Global Political Outlook 9
Major Risks Looming In 2012-2013 9
Global Flashpoints: Eurozone, Iran, Syria, Afghanistan, Korean Peninsula 9
Table: Election Timetable, Q212-Q113 13
Wild Cards To Watch 16
Security Risk Analysis 19
Table: Developed States Security Risk Ratings (scores out of 100, with 100 the best) 19
Table: Developed States Vulnerability To Terrorism Index (scores out of 100, with 100 the best) 19
Political Overview 21
Domestic Politics 21
Policy Paralysis Until November 21
Republicans To Gain In Congress, But Obama To Hold On 21
Whither The Tax Cuts? . 22
Risks To Outlook: Wild Cards In The Election . 22
Table: United States Political Overview . 23
Long-Term Political Outlook 23
Tough Challenges In The 2010s 23
Challenges And Threats To Governance And Stability 24
Scenarios For Political Change 25
Wild Cards: Terrorism And Defeat In Afghanistan 26
Domestic Politics II 27
Interventionist Streak Waning, But Superpower Status Will Linger . 27
US Military Interventions Have Mixed Track Record 27
Table: Notable US Military Interventions Since 1950 28
Korea Still A Flashpoint, 60 Years Later 30
Vietnam: US Defeat Did Not Prevent Cold War Victory 31
Gulf War: Quick Victory, But A Decade Of Unfinished Business . 31
Somalia Debacle Heightened Risk Aversion In Bosnia 31
Kosovo A Success, But At The Cost Of Strains With Russia . 32
Afghanistan Success Slides Into Quagmire 32
Iraq: Saddam''s Removal At The Cost Of Iran''s Rise . 33
US Interventions Require Long-Term Commitments . 33
The Limits Of Intervention 33
Despite US War-Weariness, Emergencies Could Force Intervention 34
Security Overview 35
Internal Security . 35
Transit Vulnerability 36
Internal Terrorism 37
Cyber-Terrorism . 37
Pandemics 38
Crime And Drugs 38
External Security Situation 38
Table: Regional Insurgent Groups – US-Designated Foreign Terrorist Organizations (FTOs) . 38
Quadrennial Defense Review (QDR) 40
Iran . 41
North Korea 43
Afghanistan . 44
Iraq . 47
Yemen 47
Armed Forces And Government Spending 49
International Deployments 52
Table: Foreign Deployments . 52
Weapons Of Mass Destruction . 53
Missile Defence Policy 54
Market Overview . 56
Arms Trade Overview . 57
Industry Trends And Developments . 59
Industry Forecast Scenario 66
Armed Forces. 66
Table: US Armed Forces Personnel, 2000-2009 (’000 personnel, unless otherwise stated) 66
Table: US Manpower Available. For Military Services, 2009-2016 (aged 16-49, unless otherwise stated) 66
Government Expenditure On Defence Industry . 67
Table: US Defence Expenditure, 2009-2016 68
Table: US Defence Expenditure Scenarios – Changing % Of GDP, 2009-2016 (US$mn) . 68
Defence Trade 71
Table: US Defence Exports, 2009-2016 (US$mn) 71
Table: US Defence Imports, 2009-2016 (US$mn) 71
Table: US Defence Trade Balance, 2009-2016 (US$mn) 72
Macroeconomic Forecast. 72
Below-Par But Sustained Recovery Continues 72
Table: United States – GDP By Expenditure, 2009-2016 (Real Growth %) . 76
Table: United States – GDP Contribution To Growth, 2009-2016 76
Company Profiles 77
Boeing 77
L-3 Communications 79
Lockheed Martin . 81
Northrop Grumman . 83
Raytheon . 85
Demographic Outlook 87
Table: The United States'' Population By Age Group, 1990-2020 (''000) . 88
Table: The United States'' Population By Age Group, 1990-2020 (% of total) 88
Table: The United States'' Key Population Ratios, 1990-2020 89
Table: The United States'' Rural And Urban Population, 1990-2020 . 90
BMI Methodology 91
How We Generate Our Industry Forecasts 91
Defence Industry . 91
Sources 92Table: Election Timetable, Q212-Q113 . 13
Table: Developed States Security Risk Ratings (scores out of 100, with 100 the best) . 19
Table: Developed States Vulnerability To Terrorism Index (scores out of 100, with 100 the best) . 19
Table: United States Political Overview . 23
Table: Notable US Military Interventions Since 1950 . 28
Table: Regional Insurgent Groups – US-Designated Foreign Terrorist Organizations (FTOs) . 38
Table: Foreign Deployments . 52
Table: US Armed Forces Personnel, 2000-2009 (''000 personnel, unless otherwise stated) . 66
Table: US Manpower Available. For Military Services, 2009-2016 (aged 16-49, unless otherwise stated). 66
Table: US Defence Expenditure, 2009-2016 . 68
Table: US Defence Expenditure Scenarios – Changing % Of GDP, 2009-2016 (US$mn) . 68
Table: US Defence Exports, 2009-2016 (US$mn) . 71
Table: US Defence Imports, 2009-2016 (US$mn) . 71
Table: US Defence Trade Balance, 2009-2016 (US$mn) . 72
Table: United States – GDP By Expenditure, 2009-2016 (Real Growth %) . 76
Table: United States – GDP Contribution To Growth, 2009-2016 . 76
Table: The United States'' Population By Age Group, 1990-2020 (''000) . 88
Table: The United States'' Population By Age Group, 1990-2020 (% of total) . 88
Table: The United States'' Key Population Ratios, 1990-2020 . 89
Table: The United States'' Rural And Urban Population, 1990-2020 . 90